Coles will spend up to $150 million on new automated fulfilment centres it says will double its home delivery capacity.
The supermarket giant said yesterday it had signed a deal to use technology from British online supermarket Ocado.
Coles will pay Ocado to install and maintain equipment in new automated customer fulfilment centres outside Sydney and Melbourne, and to use its software.
The centres will be built and Coles’ migration to Ocado’s online platform complete by the end of the 2023 financial year.
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Ocado’s robotic main warehouse at Andover, 100 kilometres west of London, covers an enormous 7.3 hectares and processes 30,000 orders a week. A huge blaze ripped through the warehouse in February, forcing the company to cancel orders and warn of a “hit to sales”.
Coles said the deal with Ocado would improve product range, availability and freshness for its online customers – and improve the company’s profit margin.
“The partnership provides a unique opportunity for Coles to deliver a best-in-class customer experience,” the company said on Tuesday.
“Coles will be better able to meet the increasing demands of its customers as it increases network capacity at a lower cost to serve.”
Customers outside metropolitan Melbourne and Sydney will also use the Ocado site. However, their orders will continue to be fulfilled by the existing store-based network.
The deal with Coles is similar to that Ocado has with Morrisons, Britain’s fourth largest supermarket.
London-listed Ocado does not own any shops but operates under its own brand and those of other retailers, including Marks and Spencer in Britain and US supermarket giant Kroger.
“Ocado is singularly focused on online grocery shopping, and as a result, has become the leading solution provider in the world,” Coles chief executive Steven Cain said.
“Ocado’s ongoing investment and retail partnerships around the world will help us continue to improve our offer into the future.”