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Swedish retailer ICA Gruppen to use Ocado's e-commerce platform

RBR Staff Writer Published 03 May 2018

Swedish retail giant ICA Gruppen has signed an agreement with British online supermarket Ocado on new e-commerce solution.

ICA Gruppen will use Ocado's e-commerce platform and technology for highly automated e-commerce picking warehouses. 

ICA Sweden plans to invest about SEK600m in between 2018 and 2022 in a fully automated e-commerce solution, including Ocado’s technology and e-commerce platform designed specifically for grocery products. 

ICA Gruppen CEO Per Strömberg said: “We are now laying the foundation for the next generation e-commerce offering, and we are putting an important piece of the puzzle in place to realise our digital ambitions for all of ICA Gruppen.

“Today we have the industry’s most efficient processes for physical shopping, and through this agreement we can create the most efficient solutions also for e-commerce.”

For this year, ICA Gruppen will invest around SEK200m ($22.5m). The project will involve investments in ICA Real Estate of about SEK500m ($56.4m).

The deal creates conditions to enhance ICA’s customer offering and improve the efficiency of grocery e-commerce and over time also for other product areas.

During 2021, ICA Sweden will switch to Ocado’s e-commerce platform and will build a new, highly automated e-commerce warehouse in the Stockholm area, which is expected to be completed in 2022.

The deal provides exclusivity in Sweden and the Baltic countries, under the conditions that ICA meets several growth targets.

This transformation to a new e-commerce platform will impair loss to ICA’s current e-commerce platform. The loss will be around SEK80m ($9m) will be fully charged against ICA Gruppen’s net profit in the second quarter of this year.

ICA Sweden CEO Anders Svensson said: “Our cooperation with Ocado entails that they will adapt their world-leading e-commerce platform to ICA’s business model with independent retailers. At the same time, we will benefit from the fact that Ocado are continuously developing the platform for themselves and other leading grocery retailers around the world.

“An automated e-commerce warehouse will enable us to offer customers a wider product range online and better deliveries while at the same time streamlining ICA’s logistics flows.”

Image: Ocado’s automated warehouse. Photo: Courtesy of ICA Gruppen AB.