France’s Groupe Casino has announced the signing of an international partnership with online retail specialist Ocado, which will see the establishment of an Ocado Smart Platform (OSP) in France.
Ocado’s OSP is a ‘scalable, modular end-to-end solution’ that can provide an answer to the ‘opportunities and challenges posed by shifting offline/online trends in grocery’, the company said.
Using the system, which will see the development of an automated warehouse, and the implementation of front-end website functionality and last-mile routing management, Groupe Casino will seek to increase its offering and reduce costs through its online channels.
It indicated that Monoprix.fr, the web platform for its Monoprix brand, will be the first retailer to take advantage of the system.
The agreement sets out plans for the ‘immediate initiation’ of the development of a Customer Fulfilment Centre (CFC) using Ocado’s proprietary Mechanical Handling Equipment (MHE) solutions, which will serve the Greater Paris area, the Normandie and Hauts de France Regions.
The development of this is expected to take two years.
Groupe Casino has agreed to pay Ocado ‘certain upfront fees’ upon the signing of the agreement, and during the development phase, then ongoing fees linked to its utilisation of capacity within the CFC and service criteria.
Following the initial CFC development, both companies added that they will ‘consider’ other CFCs close to large urban areas.
“This agreement is a major leap in terms of quality,” said Jean-Charles Naouri, chief executive of Groupe Casino.
“50,000 food items will be offered in the first stage to customers in the Greater Paris area with precise and speedy delivery at home and through a platform which makes it achievable to do this profitably. Groupe Casino is very proud to have sealed this deal with Ocado which will further strengthen the quality of service available to its customers, at the core of its commitments for 120 years.”
Commenting on the news, Bruno Monteyne of Bernstein Research said, “Deals like this will be signed but justifying the Ocado share price requires one such big deal each year. While the previous deal was more a shadow of a deal, this is a great deal for Ocado. There may be more deals in the pipeline. However, justifying the Ocado share price requires one big deal per year for the foreseeable future and we don't believe there is sufficient deal potential for this.”
In its third quarter, Ocado announced a 13.1% increase in sales, to £312.7 million.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine