Ocado Group will lose £7 million in annual fee revenue following Sobeys’ decision to shut its Calgary customer fulfilment centre, the company announced today.
The closure stems from slower-than-expected growth in Alberta’s online grocery market, which failed to meet original projections for size and expansion pace.
In isolation, losing the Calgary centre isn’t the end of the world for Ocado, but it follows a string of closures by Kroger in the US that are becoming a concerning trend.
Ocado shares were down 9% at the time of writing.
Ocado will receive £18 million in compensation this financial year for the closure of the Alberta site. Despite the revenue hit in FY26 from the closure, the company still believes it can become cash flow positive during that period.
The Canadian grocer will continue operating Ocado-enabled facilities in the Greater Toronto and Montreal areas, serving Ontario and Quebec markets where e-commerce penetration shows stronger growth potential. Development of a Vancouver-area fulfilment centre remains paused, with the timeline under regular review.
Ocado is deploying new technology to the remaining sites, including its Swift Router functionality for same-day deliveries and integration with third-party platforms. Sobeys continues to use Ocado’s AI-powered in-store fulfilment software across 87 stores nationwide.
“Sobeys is an important partner to Ocado, and we have taken a pragmatic approach to refining the network and placing our partnership on the right footing to secure long-term, sustainable growth in the Canadian market,” said Tim Steiner, CEO of Ocado Group.
“This has meant addressing some key challenges from early network planning decisions, in particular where the market has not developed as anticipated. It has also led to agreement on deepening our partnership in key markets.”
“Online grocery in North America has continued to develop, and Ocado’s technology has evolved significantly since our first CFCs were launched in the region. The changes we have made in our relationships with both Sobeys and Kroger represent a reset of our North American business, placing those partnerships in the best position to secure long-term growth, while reopening a substantial market for Ocado’s much evolved technology.”