Marks & Spencer and Ocado enter joint venture
Retailer Marks & Spencer (M&S) has entered a joint venture with online grocer, Ocado. M&S will acquire 50% of Ocado for £750m, in a bid to transform online grocery shopping for UK consumers.
Ocado will keep its name, but will now offer M&S products, when its contract with Waitrose comes to an end – a move that will happen by the end of 2020 at the latest.
M&S’s previous attempt to offer online groceries was found to be uneconomical due to the high cost of manually picking from store, including delivery, replenishment and logistics costs.
Steve Rowe, M&S CEO said: “I have always believed that M&S Food could and should be online. Combining the strength of our food offer with leading online and delivery capability is a compelling proposition to drive long-term growth.
“Our investment in a fully aligned joint-venture with Ocado accelerates our Food strategy as it enables us to take our food online in an immediately profitable, scalable and sustainable way.”
Tim Steiner, Ocado CEO said: “We are delighted that our UK retail business will become a joint venture with M&S. This is a transformative moment in the UK retail sector with the combination of two iconic and much-loved retail brands set to provide an unrivalled online grocery offer.
“We believe that this is the best outcome for customers, offering even greater range, service, quality and value. The combination of Ocado and M&S will allow us to grow faster, add more jobs, and create more value, as we lead the channel shift to e-commerce here in the UK.”