Ocado in talks with potential new partners amid robotic warehouse closures

London-listed retail technology firm Ocado is navigating a period of intense restructuring as it seeks new partnerships following the closure of major robotic warehouse facilities. The company, which provides automated technology for distribution centres and operates a joint online grocery venture with Marks & Spencer, faces mounting pressure to demonstrate the viability of its fulfilment model after two key North American clients decided to retreat from their automated operations.

The strategic shift comes in the wake of decisions by Kroger in the US and Sobeys in Canada to shut down robotic warehouses operated by the group. Both retailers cited subdued consumer demand as the primary driver for the closures. These setbacks have raised broader questions among market observers regarding the future necessity of large-scale, warehouse-based automation in an industry increasingly shifting toward fulfilling online orders directly from existing retail stores.

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Financial Performance and Market Reaction

On Thursday, 16 July 2026, the company reported group revenues for the six months to 31 May 2026 of £1.04 billion, representing a 54 per cent increase compared to the previous year. However, this headline growth was heavily bolstered by £354 million in one-off fees and other revenues linked to the proposed warehouse closures. When these termination payments are excluded, underlying revenue growth was limited to 1 per cent.

While the firm reported earnings before tax of £17 million—a recovery from a £173 million loss during the same period a year earlier—investor reaction was sharp. Shares in the company fell 15 per cent on the morning of the announcement. Reporting from Reuters noted that the stock reached a 13-year low following the update, reflecting concerns about the company's ability to compete with rapid delivery alternatives and in-store fulfilment options.

Corporate Strategy and Leadership

Chief executive Tim Steiner, who co-founded the firm, remains at the helm of the business. Last week, the company confirmed he would continue in his role until December next year, ending months of speculation regarding leadership and internal friction involving chair Adam Warby and board member Jorn Rausing. The group plans to formalise its succession strategy at the start of its 2027-28 financial year on 1 December 2027.

Despite the current volatility, Steiner maintains a positive outlook on the company’s trajectory:

"The first half of the year has seen accelerating international volume growth, strong commercial momentum, improved organisational efficiency, and rigorous cost discipline."

Tim Steiner, Chief Executive, via Bdaily

Steiner emphasized that the expiration of several exclusivity agreements has provided the company with more freedom to pursue new opportunities. The firm is currently engaged in what it describes as "live engagement" with potential partners in the United States and elsewhere.

Looking Ahead

The company’s roadmap for the coming months focuses on three primary pillars as it attempts to regain market confidence:

• Targeted Expansion: Seeking "multiple new grocery prospects" across North America, Europe, and the Asia Pacific region.
• Technological Pivot: Promoting a new portfolio of technology solutions, specifically smaller, store-based automation services designed to pick orders for grocery delivery.

Analysts, however, remain divided on the outlook. While Ocado expresses confidence that its chances of securing new partners within the next six months are good, some market voices, including RBC analysts, have questioned whether the company’s mid-term targets remain achievable given the evolving competitive landscape. For Ocado, the coming period represents a critical juncture in proving that its automated fulfilment technology remains a central requirement for the future of global grocery retail.