Online grocer Ocado has confirmed its second major global partnership and its first foray into North America after reaching a deal with Canadian retailer Sobeys.
Ocado, which has helped drive online shopping in Britain, one of the world's most advanced e-commerce markets, has been to trying to sell its proprietary technology to global supermarkets in recent years, with new deals seen as key to the company's valuation.
The FTSE 250 company will spend two years helping Sobeys, Canada's second-largest food retailer, build a warehouse outside Toronto and will allow the chain to use its ecommerce, product picking and logistics technology to take and deliver orders.
Ocado shares jumped by nearly 10 per cent after this announcement.
Ocado expects the deal to have minimal impact on its earnings this year with an extra £15m in capital expenditure, but said profitability would grow in 2019 and beyond.
Sobeys operates more than 1,500 stores across Canada and recorded sales of C$23.8 billion previous year.
"The (North American online grocery) market is growing, there are a lot of buyers there, and we definitely see an opportunity", Ocado Chief Financial Officer Duncan Tatton-Brown told reporters, regarding potential future deals.
Ocado's technology will also be used to manage Sobeys' delivery system and customer service.
"Sobeys is a highly successful and much admired Canadian business and we are proud that they have chosen Ocado Solutions to partner with to build their online grocery business".
A partnership with an worldwide retailer has been seen by analysts as key to Ocado's growth prospects.
Ocado's worldwide deals are turning out to be a bit like buses.
"Ocado is the only global provider of an end-to-end platform solution for online grocery retailing. this will become increasingly recognized by retailers globally, leading to a number of deals being signed with Ocado over time", Malek said.