Russ Mould, investment director at AJ Bell, said: “Online groceries specialist Ocado delivered some much-needed good news on Friday, unveiling an agreement with Asda to support an upgrade of the latter’s web-based platform.
“For Asda, this deal may give it some heft to take on Tesco and Sainsbury’s at a time when its position in the UK groceries market is looking fragile, while for Ocado it is a ray of light after a difficult period for the business.
“It still feels a world away from the idea Ocado could become a global leader, licensing its platform to help supermarkets around the world set up their own web-based solutions, a story which really captured the imagination during the pandemic, particularly given this deal follows a major setback with its big US partner Kroger last year.
“Despite a healthy bump today, the shares still sit more than 90% below the all-time highs achieved in 2020 when excitement around the stock and the potential for global growth hit fever pitch.
“Management at first blamed Covid restrictions for preventing it from meeting companies to agree contracts at the pace the market was hoping for. In the intervening period, the company has been plagued by operational issues, a patent dispute and surging costs.
“Long-standing shareholders will hope this is the first step in a less grandiose but still meaningful growth story.”
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