Ocado says it has now completed its £750m deal to turn its online grocery business into a joint venture with M&S - although it will not start to sell M&S products until September 2020.
The retail business will start to sell M&S products from September 1 2020, unless Ocado’s relationship with Waitrose ends sooner. Ocado says that from that date more than 75% of the UK population will be able to buy their full grocery shop from ocado.com, including more than 6,500 M&S food products, Ocado’s own-brand and own-label products as well as other branded goods.
"Ocado Retail’s future, as part of a joint venture with M&S, is full of opportunity,” said Ocado chief executive Tim Steiner. “The new company will be able to offer customers even greater range, service, quality and value. Our collaboration will also allow us to grow the business faster, add more jobs, and create more value for all our stakeholders. We are very excited to be working together.
"I would like to take this opportunity to thank Lawrence for his incredible achievements with ocado.com since 2011, which he has been instrumental in growing to the business it is today and I look forward to continuing to work with him, both during his transitional role at Ocado Retail Limited and when he moves back to the Ocado Group. I am very excited about Ocado Retail Limited continuing to realise its fullest potential under Melanie’s leadership."
Steve Rowe, M&S chief executive, said: "I have always believed that M&S Food could and should be online. The addition of Ocado to our family of businesses marks M&S’s first truly transformational step in shaping our future as a digital first retailer, as we combine the magic of M&S food with Ocado’s award-winning service to create a new and compelling proposition. Through its unique OSP technology, Ocado has developed the most cost advantaged model in online grocery retail and our new partnership unlocks growth for M&S Food through an immediately profitable, scalable presence in the UK’s fastest growing grocery sales channel.
"I am absolutely delighted that our JV will be led by Melanie. She is a real talent; who combines extensive retail knowledge, strategic vision and a focus on delivery."
The Ocado Retail business, owned equally by the two partners, will be headed by chief executive Melanie Smith, currently strategy director at M&S, while Lawrence Hene, who is interim managing director of Ocado Retail, will serve as deputy chief executive during a transitional period. Hene will then move back to the Ocado Group.
The Ocado Retail board will also include Ocado chief executive Tim Steiner – who will chair the board – and chief financial officer Duncan Tatton-Brown as well as M&S chief executive Steve Rowe and food managing director Stuart Machin.
M&S is a Leading retailer in IRUK Top500 research, while Ocado is Top100.
Image courtesy of Ocado