Ocado poised to offer super-fast delivery - supplying food in under an hour

Ocado could soon launch a rapid response delivery service in the US to take on fast-growing rivals such as Uber Eats and American technology start-up Takeoff. It would be similar to the company’s fledgling Zoom service, currently being tested in West London, which delivers to the door in less than an hour. Ocado finance director Duncan Tatton-Brown is understood to have presented the idea to potential investors at a meeting in Barcelona.

He said the plan could form part of the company’s ‘developing’ relationship with $120billion (£93billion) retailer Kroger and would cater to the growing demand for same-day delivery in major cities.

The launch of Ocado Zoom – first revealed by The Mail on Sunday in February – allows shoppers to order food costing as little as £15 compared with a minimum of £40 through its main service. Tatton-Brown was speaking at a private event, run by investment bank Morgan Stanley, following speculation that its relationship with Kroger was cooling. Rivals such as Uber and Takeoff Technologies have unveiled strategies to secure a slice of the takeaway delivery and home dining markets.

Ocado has dismissed doubts over Kroger’s plans to open 20 automated warehouses across the United States. Questions had been raised in a report by US analysts at equity research firm Jefferies, published last month. Jefferies said Kroger’s Ocado strategy could be a ‘mis-step’ when compared to ‘micro-fulfilment’ services – citing Takeoff as a potential threat, despite launching just three years ago.

Speaking at the Barcelona event, Tatton-Brown is also understood to have raised the possibility of forming partnerships in major Asian markets such as Japan, South Korea and China, which it is understood Ocado has been eyeing for more than a year.

It is thought the investors at the event were specialists in technology rather than from the retail and grocery industry.

Tatton-Brown said some of Ocado’s more traditional investors have been struggling to understand its evolving business model which involves plans to develop services outside the grocery delivery market.

Takeoff, based near Boston, Massachusetts, describes itself as an ‘automated grocery fulfilment solution’ with a delivery department that ‘sits inside your store, working alongside your employees to fulfil orders’. It says on its website: ‘Takeoff offers the only eGrocery solution that generates profits. We are transforming eGrocery into a viable option for you and your customers.’ Jefferies’ analysis suggested that each Ocado shed could take about four years to turn a profit. It concluded there would be limited gains in overall market share for Kroger. Takeoff is still relatively unproven while Kroger bosses have been effusive about their large-scale Ocado partnership.

Ten days ago Kroger announced that its sixth Ocado warehouse would be in Wisconsin. The 350,000sq ft centre will open within two years.

One Kroger executive said the company was ‘incredibly excited’ about the plans.