Ocado to build its third warehouse in Japan by 2027
- Ocado Group and Aeon began their partnership in November 2019
- The online grocery giant's third Japanese 'CFC' will be in Miyashiro
Ocado Group intends to construct its third robotic warehouse in Japan as part of its tie-up with Aeon.
The FTSE 250 firm began a partnership in November 2019 to develop the Japanese retail giant's online grocery operations using its Ocado Smart Platform.
In 2023, Ocado opened a 'customer fulfilment centre' in Chiba to serve customers across the Kanto region.
Tie-up: Ocado Group began a partnership in November 2019 to develop the online grocery operations of Japanese retail giant's Aeon using its Ocado Smart Platform
It plans to launch another one in the city of Hachioji in 2026 and now wants to open a third CFC in Miyashiro, Saitama Prefecture, the following year, with more to follow afterwards.
Ocado also announced that it would bolster labour productivity levels by upgrading its live operations with new technologies, such as its on-grid robotic pick.
Based in Hatfield, Hertfordshire, Ocado sells automated technology to companies, but is better known for running a grocery website in a joint venture with Marks & Spencer.
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Tim Steiner, Ocado's co-founder and chief executive, remarked: 'Today is an exciting moment for Aeon and Ocado's relationship as we deepen our already strong partnership.'
'As demonstrated by the state-of-the-art CFC live in Honda, Ocado is helping Aeon Next to provide a seamless online grocery experience to customers across Tokyo.
'We can't wait to bring this service to even more customers in the years to come.'
The announcement marked a significant uplift for the business, which suffered a massive blow in June when Canadian supermarket chain Sobeys revealed it would delay opening its fourth Ocado robotic warehouse in Vancouver.
Ocado declared it would instead focus on increasing orders and sales across its existing warehouses.
It further said that the mutual exclusivity agreement with Sobeys, Canada's second-largest food retailer, had ended after six years.
Ocado Group shares plummeted to their lowest value in six years as a result.
Although they have somewhat recovered and were 5.5 per cent higher at 346.2p on mid-Monday afternoon, their value has still more than halved this year.
While Ocado's sales are growing, they have slowed considerably since the end of Covid-related restrictions encouraged many consumers to return to in-store grocery shopping.
In addition, the company has struggled to turn a profit, posting a £394million loss for the 12 months ending December 2023 and a £581million loss the year before.
Making online grocery sales profitable has traditionally been very challenging due to the major infrastructure costs needed to build a broad operation and the 'last mile' problem - the huge expense of transporting products from warehouses to homes.
At the same time, Ocado is embroiled in a dispute with M&S over a final payment related to their joint venture.
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