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Wednesday 11 December 2019

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M&S confirms delivery tie-up talks with Ocado

Written by Hannah McGrath
26/02/2019

Marks and Spencer has confirmed reports that is in discussions with Ocado, following reports that it is planning a joint venture to expand M&S online food delivery operations.

The retailer, which is currently in the midst of a £25 million digital transformation programme, announced this morning that it is “in discussions with Ocado Group plc regarding a joint venture in UK retail”.

However, in a statement, the company stressed that a formal agreement was yet to be made. “There is no certainty that these discussions will result in any agreement or as to the timing of any such agreement,” it read.

Last month it was reported that the talks with M&S, which has yet to set up a dedicated online grocery delivery operation, could involve the purchase of Ocado’s automated distribution centres, delivery vans and lorries.

There was speculation at the time that a potential tie-up could bring an end to Ocado’s longstanding delivery deal with Waitrose, a rival to M&S in the premium grocery market.

The development of a fully-fledged grocery delivery service is reportedly part of M&S chairman Archie Norman’s plans to use its strong food business to turn around the company’s fortunes, as clothing and homeware sales fall.

The retailer saw a drop of 1.2 per cent in like-for-like food sales over the Christmas period, compared to an overall fall in sales of 3.9 per cent, amid a backdrop of turbulence for the UK High Street.

In a separate deal, Ocado has been running the technology and delivery operations for Morrison's online grocery service since its launch in 2014.


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