ASDA has renewed and expanded its partnership with Microsoft, marking one of the largest technology deals in UK retail to date, according to the Windows-maker.

The supermarket chain, which operates more than 1,200 stores and employs around 140,000 people, is accelerating its shift towards a cloud-first, AI-powered business model.

The move follows ASDA’s separation from Walmart four years ago, a process that allowed the retailer to rebuild its digital infrastructure from scratch. The initiative, known internally as Project Future, established a “digital core” of specialist systems, all built on a cloud-first principle.

Matt Kelleher, ASDA’s chief digital officer, said the strategy enables the company to focus on its strengths. “We wanted world-class partners to look after the digital core, so we could focus on what we’re really good at: retailing and using data to deliver propositions for customers,” he explained. “When you’re cloud-first, you can flex, you can optimise, and you can trust your partners to customise, update, maintain and protect the systems. That’s a real advantage.”

The renewed agreement sees Microsoft Azure continue as ASDA’s primary cloud platform, supporting everything from data analytics to security. Azure Databricks and Microsoft Fabric are used to turn data from core platforms into pricing and deals for customers, while Microsoft Defender secures the digital core.

Integration is a key focus, with Azure Integration Services acting as the “stitching” that connects ASDA’s strategic platforms. “We needed to leverage Microsoft’s integration layer, Azure Integration Services, to make sure that all of those core providers spoke to each other,” said Kelleher. “So much data has to flow to make availability feel simple for customers.”

The partnership is also transforming day-to-day work for ASDA colleagues. Microsoft 365 Copilot is helping staff—from executives to store teams—simplify tasks and reclaim time. “Copilot is with me from the moment I come into the office,” Kelleher noted. “I can ask ‘what have I missed?’, ‘what is it that I need to know?’, ‘what do I need to prioritise?’”

ASDA’s cloud-first approach is designed to sharpen price leadership and improve product availability. Decisions about pricing and product lines are informed by Azure-stored customer data, enabling rapid responses to trends and competitor positioning. The retailer is also exploring AI-powered computer vision to optimise store layouts and enhance customer experiences.

Kelleher emphasised the importance of collaboration for growth. “Microsoft is a critical partner in helping us create that growth,” he said. “We’re incentivised to be more productive, create better value for customers, and to grow.”

ASDA’s investment in technology aims to attract top talent and build a confident workforce for an AI-enabled future. With digital foundations in place, the company is now focused on growth, supported by its strengthened partnership with Microsoft.

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