The name Ocado has long been synonymous with cutting-edge technology.
Founded at the turn of the century and floated in London in 2010, Ocado – which had built warehouse automation technology – launched an app in the early smartphone years and runs an online-only supermarket.
John Lewis was an early backer and it also provided the tech for the online business of its Waitrose subsidiary.
In 2019, after nearly two decades, Ocado ditched Waitrose and agreed a joint venture (Ocado Retail) with rival M&S – which saw the latter pay £750 million – to sell its food instead.
However, as THG found with its technology division Ingenuity, R&D and robotics require a constant stream of investment and are rarely profitable compared with their retail counterparts.
THG eventually demerged Ingenuity, which like Ocado has retail clients, in January 2025 to protect the value of its retail arm’s shares, which had dropped dramatically since IPO.
Ocado’s valuation remains higher than at flotation in 2010, but that may not be the case forever – and at 200 pence today, it is some way short of the more than 2,200p it reached at the height of COVID.
Back then co-founder and CEO Tim Steiner declared that robotics fulfilment technology was the future of supermarket trading as vast swathes of the population were forced to order from home. Ocado
However despite securing global deals including with Casino in France and Alcampo in Spain, its flagship clients in the United States and Canada – Kroger and Sobeys, respectively – have closed or plan to close their Ocado-powered fulfilment centres.
The firm admitted that in the US, people prefer to make immediate grocery orders – fulfilled by the likes of Uber Eats – and are more likely to collect an order from a shop.
It has caused Ocado to lose more than $60m in annual fee revenue, although the impact was tempered by compensation fees. Ocado subsequently said it would lay off 1,000 staff as part of a £150 million cost-cutting drive, with two-thirds of those in the UK. Half of the total positions lost are based in its technology offices in Hatfield, Welwyn Garden City, central London, Bulgaria, Poland, Spain and Canada, with the majority in Hatfield.
Ocado Retail continues to perform, posting a 16.3% rise in revenue to £1.52bn, while its technology arm saw sales grow 13% and its logistics division, which operates fulfilment centres in the UK for Ocado Retail and Morrisons, saw sales rise 11.5%.
However the technology investments caused the overall group to push back its goal of turning cash flow positive by a year to November 2027.
Investors have reacted by jumping ship, with Ocado’s share price down 14% in the year to date and 34% in the last six months.
However its underlying EBITDA in 2025 jumped 59% from £112m to £178m, driven primarily by its robotics technologies, with profit margins expanding from 16.2% to 25%. And Ocado has close to £740m of cash & equivalents on its balance sheet.
So, as Ocado’s share price rises 4% today (Tuesday 10th March), what does the future hold?
Large distribution centres run by robots sound like the future, but are unwieldy and slower than the rapid collections and delivery of in-house networks, as seen at the likes of Tesco and Sainsbury’s.
And the truth is, the majority of people still prefer to visit the supermarket in person, browse and save on delivery charges – with a wide-held view that to do so means you can pick the food with the longest date and ensure there are no inappropriate substitutions that ruin your planned recipe.