Coles partners with Ocado to open ‘high tech’ customer fulfilment centres

Coles, the Australian supermarket chain, has opened two new customer fulfilment centres (CFCs) powered by Ocado Group technology.

The new warehouses, based in Sydney and Melbourne, will use artificial intelligence and automation to support operations though the Ocado Smart Platform, an end-to-end e-commerce, fulfilment and logistics technology designed for online grocery retail.

Next day home delivery orders from stores in metropolitan Melbourne and Sydney are expected to be transitioned to the CFCs by the end of the year, with further growth expected in 2025.

Ocado said the move would enable “a new level of customer service” and a differentiated home delivery offer across the Australian cities.

It added that facilities will enable Coles customers to experience “significant improvements” in freshness, improved order rates and range, and opportunities to trial new products.

“Australia is one of the fastest developing markets in the world for grocery e-commerce, and Coles is already a market leader in the online channel,” said Tim Steiner, chief executive, Ocado Group. “As these CFCs ramp up, we are excited to help Coles bring a step-change in customer experience online to households across Sydney and Melbourne.”

Retail Systems has approached Coles for comment on the move.

Following the opening of the two CFCs in Melbourne and Sydney, and the launch of Alcampo’s Madrid CFC in July, Ocado now operates 25 live CFCs in markets around the world.

In July, Kroger announced it was rolling out a range of new Ocado-developed automated technologies across its CFC network.

The technologies include proprietary Ocado technology, such as its On-Grid Robotic Pick (OGRP) and Automated Frameload (AFL.)

Last month Ocado also revealed that it had significantly reduced its losses thanks to continued investment in its tech arm, which contributed to revenue growth.

According to its latest half-year report, Ocado’s Technology Solutions business continues to show strong financial progress, with revenue growth steadily rising to 21.8 per cent.

During the same month, Ocado has announced plans to strengthen its partnership with Japanese retail giant Aeon by building a third customer fulfilment centre (CFC) in Japan.

The new robotic warehouse will be located in Kuki-Miyashiro, Saitama prefecture, and is slated to open in 2027.