• UK-based online supermarket Ocado intends to raise about $1.3 billion through a fresh issue of new shares and debt as it seeks to expand its online supermarket platform.
  • Ocado’s chief executive Tim Steiner said the coronavirus pandemic is a “catalyst” for a permanent move towards growth in online shopping.
  • While the retailer already has a strong partner base with nine global retailers, it sees a “huge” opportunity in expanding associations with new affiliates.
  • Visit Business Insider’s homepage for more stories.

British online supermarket Ocado plans to raise over £1 billion ($1.3 billion) in capital, enhancing its online delivery services as people in the UK continue to shop more from the comfort of their homes.

Ocado said the coronavirus pandemic has driven a significant acceleration in online grocery sales which has made way for a “permanent redrawing” of the global grocery industry.

The group said on Wednesday it plans to raise £657 million ($830 million) in new shares and £350 million ($442 million) in convertible bonds, giving it the “flexibility to move quickly and capitalize on the full opportunity set over the medium term.”

“The current crisis is proving a catalyst for permanent and significant acceleration in channel shift globally which we believe will redraw the landscape for the grocery industry worldwide,” Ocado’s CEO Tim Steiner said in a statement.

47% of existing online shoppers in Europe have increased their online grocery purchases since COVID-19 and are expected to continue, Ocado said, citing data compiled over four weeks to May 16 by analytics firm Nielsen.

The group said UK online market penetration had reached 13% in May 2020, compared to just 7% last year before the coronavirus struck.

The grocery chain already has a bunch of licensing deals with nine partners including US supermarket giant Kroger, Japanese retailer Aeon, Australia's second-largest grocery chain Coles, Groupe Casino in France, and Sobeys in Canada.

But Ocado said it sees a "huge" opportunity in signing new partner deals to its growing platform.

Goldman Sachs and JPMorgan will act as joint global coordinators for Ocado's capital raise.

In May, the chain said its retail sales were up 40.4% in its second quarter compared to last year.