Briefing

Sobeys partner Ocado raising $861 million for robotic warehouses

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The U.K.-based firm is issuing convertible bonds to pay for the warehouses, which other grocery companies plan to use for food delivery. (Financial Times)

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Talking point: In the past two years, Ocado has struck deals with major grocery chains in Sweden, France and the U.S. to build robot-fuelled warehouses powering online delivery. On Friday, the firm signed a deal with Japanese retailer Aeon to build warehouses designed to serve the entire country. In Canada, Ocado is building two warehouses for Sobeys: one designed to serve the Greater Toronto Area scheduled to open in early 2020, and another based in Montreal for 2021. For large grocery chains, it provides a technological alternative to Amazon, which uses robots extensively in its own warehouses. Sobeys’s reliance on Ocado offers a counterpoint to the direction Loblaws has taken recently: launching its own online marketplace, an Amazon Prime-style rewards program and, as outlined above, making a play for the lucrative meal kit market.