May 16, 2019

Waitrose enlists Ocado co-founder for online expansion

Waitrose has announced a big expansion in its online activities in a riposte to its current partner, Ocado, which is ending its supply agreement with the supermarket chain in favour of a joint venture with Marks and Spencer. Waitrose has supplied Ocado with groceries since it was founded in 2000, and held a stake in the company until 2011. TDP will act mainly as a supplier of technology and advice, rather than building and running facilities in return for a percentage of their sales - the template used by Ocado for agreements with retailers ranging from Casino in France to Kroger in the US. All the capital spending will be funded by Waitrose and the warehouses and delivery vans will be owned by the retailer. Within Waitrose, improving the performance and reach of its online operation is regarded as important if it is to poach Ocado customers who are loyal to the employee-owned retailer's products. After the M&S deal was announced, analysts at HSBC surveyed 250 Ocado customers and found that more than a fifth of them would stop shopping there once Waitrose products were no longer available; extrapolated to Ocado's current customer base, that suggests about 150,000 could defect.

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