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Ocado seals Coles online grocery tie-up

Agreement sees Australian chain's online grocery business adopt Ocado Smart Platform technology in a further boost to UK firm

Ocado seals Coles online grocery tie-up

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Ocado has continued its recent spate of new business tie-ups by agreeing to develop Australian retailer Coles' online grocery business using the Ocado Smart Platform (OSP).

The deal follows the recent announcement that OSP will underpin the launch of a new joint venture with Marks & Spencer to take the upmarket retailer into the online grocery sphere.

Coles is one of Australia's largest retailers, trading from 818 supermarkets, 911 liquor stores, and 712 Coles Express petrol stations across the country and with a turnover of some A$39.4 billion (£22bn). The company is already a market leader in online grocery retailing in Australia through Coles Online, with more than A$1bn of sales on an annualised basis.

Adoption of OSP will enable Coles Online to serve customers in Australia's larger urban areas by fulfilling orders through Ocado's robotic customer fulfilment centres (CFCs), the two sides explained, with customers in less populated areas benefiting from Ocado's proprietary store-pick software.

Coles and Ocado have agreed to operate two CFCs, one in Sydney and one in Melbourne, with the facilities expected to go live within four years. Coles Online will also transition its store-pick based operations to the Ocado Smart Platform, which is expected to take place in parallel with the CFCs going live.

The agreement is exclusive in Australia as long as certain conditions continue to be maintained, Ocado said.

Steven Cain, chief executive of Coles Group, said: "Ocado is singularly focused on online grocery shopping and, as a result, has become the best in the world. We are delighted to be partnering with them to make life easier for Coles' customers here in Australia. Ocado's ongoing investment and retail partnerships around the world will help us continue to improve our offer into the future".

Ocado chief executive Tim Steiner added: "Today marks another big moment in the continuing transformation of Ocado. Our unique, proprietary and industry-leading technology is bringing new growth opportunities to retailers around the world and changing the customer experience of grocery shopping. Coles is a grocer with a global reputation for innovation and outstanding commitment to their customers, and I am delighted we will be working together in the years to come to reshape the food retail landscape in Australia."

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