The U.K. online delivery market has so far been dominated by Amazon, but a popular new player, Ocado, has warehouse robots that travel three times the speed of Amazon’s, according to a report by Bloomberg.
Investment firm Peel Hunt said analysts James Lockyer and Damindu Jayaweera were “underwhelmed” by Amazon’s automation investment after they visited the company’s U.K. warehouse — ostensibly the most technologically advanced in Europe.
Ocado has a market value that’s roughly 100 times smaller than Amazon’s, but it’s gone from being Europe’s most shorted stock to one of its best performing. Shares in the online-only grocer have more grown about 72 percent in 2019 so far, after jumping almost 50 percent in 2018.
Peel Hunt’s report also pointed out that Amazon has a bigger reliance on conveyor belts and a lower utilization rate than Ocado, and they reported that the company is “even more positive” on Ocado’s outlook.
Ocado has automated-warehouse agreements with a few major supermarket chains, including Kroger and Coles Group.
“Kroger is excited to partner with Ocado — one of the most innovative, advanced companies in the world — to redefine the grocery shopping experience for customers along the East Coast,” Kroger Chairman and CEO Rodney McMullen said in a press release. “We are incredibly excited to introduce customer fulfillment centers in this region to deliver on our Restock Kroger vision to serve America through food inspiration and uplift.”
Ocado also started a joint venture with Marks & Spencer Group in an effort to outpace Amazon in the area of delivery. The service is called Zoom and it wants to deliver within major British cities in less than an hour, which would beat Amazon by 60 minutes.