Mystery continues to surround the identity of Ocado’s first international partner following its announcement earlier this week.
On Tuesday, the online grocer announced it had signed a contract with a “regional European retailer”, one-and-a-half years after its self-imposed deadline for an international deal.
It declined to reveal the identity or size of the retailer, which wished to “retain competitive advantage” by keeping the plans secret until its online service launches.
Ocado will provide the retailer with its software platform, expertise and support services “required to create an efficient and intelligent online grocery business”.
This means Ocado will help build the retailer’s website and mobile app, as well as sharing its routing technology.
But the retailer will not use Ocado’s cutting-edge fulfilment technology - as seen in its Andover warehouse, opened in November - and instead fill orders from its own manually operated centralised warehouse.
The retailer will have the option to buy extra elements of the Ocado Smart Platform - its solution for third-party retailers - at a later date.
Ocado did not reveal the deal’s value but said the retailer would pay an upfront fee together with ongoing fees based on volume online. It expects the arrangement to be earnings and cash neutral in the current and 2018 financial years, and increasingly accretive thereafter.
Ocado CEO Tim Steiner said: “Our discussions with other retailers across the globe are ongoing and we continue to expect to sign multiple deals in the medium term.”
Analysts including Jeffries, Bernstein, JP Morgan and Merrill Lynch hailed the deal as a step in the right direction, despite the small scale of the agreement making it “slightly underwhelming”.