Ocado to build third warehouse in Japan by 2027

Ocado Group plans to build its third robotic warehouse in Japan as part of its partnership with Aeon.

The FTSE 250 firm entered into 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 service center” in Chiba to serve customers across the Kanto region.

It plans to launch another in Hachioji City in 2026 and now wants to open a third CFC in Miyashiro, Saitama Prefecture, the following year, with more to follow.

Ocado also announced it will improve labour productivity levels by enhancing its live operations with new technologies, such as its networked robotic picking.

Based in Hatfield, Hertfordshire, Ocado sells automated technology to businesses but is best known for running a grocery website in a joint venture with Marks & Spencer.

Tim Steiner, Co-Founder and CEO of Ocado, commented: “Today is an exciting time for the relationship between Aeon and Ocado as we deepen our already strong partnership.”

‘As demonstrated by the state-of-the-art CFC at Honda, Ocado is helping Aeon Next deliver a seamless online grocery shopping experience to customers across Tokyo.

“We look forward to offering this service to even more customers in the years to come.”

The announcement marked a significant boost for the business, which took a hit in June when Canadian supermarket chain Sobeys revealed it would delay the opening of its fourth Ocado robotic warehouse in Vancouver.

Ocado said it would instead focus on increasing orders and sales at its existing warehouses.

He also said the mutual exclusivity agreement with Sobeys, Canada’s second-largest food retailer, had ended after six years.

Ocado Group Shares As a result, they fell to their lowest value in six years.

Although they have recovered somewhat and were up 5.5% at 346.2 pence by mid-afternoon on Monday, their value has 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 stores to buy food.

The company has also struggled to turn a profit, posting a £394m loss in the 12 months to December 2023 and a £581m loss the year before.

Traditionally, making online grocery sales profitable has been a major challenge due to the large infrastructure costs required to build a large operation and the “last mile” problem — the enormous 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.