Sobeys inks deal with Ocado to launch online grocery store by 2020

Nova Scotia-based grocery chain Sobeys will partner with British firm Ocado to launch an online grocery store.

First distribution centre to be built in Greater Toronto Area

Sobeys has partnered with Ocado to launch an online grocery ordering and delivery system soon. (Andrew Vaughan/Canadian Press)

Nova Scotia based grocery chain Sobeys will partner with British firm Ocado to launch an online grocery store.

The as yet unnamed service will allow Sobeys customers to shop for groceries online or via an app, and their order will be assembled, processed and delivered to their door.

The partnership will involve Ocado building a warehouse outside Toronto equipped with robotic technology, which will take about two years to build. Down the line, the two companies say they may build similar facilities in other urban markets, but at launch only one centre will be built, somewhere in the Greater Toronto Area.

Customers will have to be near that facility's distribution centre in order to have their order processed.

A spokesperson with Sobeys told CBC News via telephone that the first customer deliveries are expected some time toward the end of the 2020 fiscal year.

"Sobeys intends to play to win in Canadian online grocery shopping," Sobeys CEO Michael Medline said in a release.  "We are very excited to bring this best-in-the-world grocery e-commerce experience to Canadian customers."

Retail analyst Jim Danahy called the deal a "brilliant move" for Sobeys, adding that the grocer was smart to work with a British company because the United Kingdom is comparatively much further ahead in terms of e-commerce.

"The U.K. is at least five years ahead of Canada in terms of technology and consumer habits," he said in an interview with CBC News. "British consumers have been buying much more online for years, including groceries."

"This is going to give them a huge leap forward from trying to build it themselves," Danahy said.

with files from Meegan Read