No stake for Morrisons, says Ocado

ONLINE supermarket and delivery group Ocado has said it is continuing talks with supermarket giant Morrisons.

But it said the discussions do not involve Morrisons acquiring either the whole of, or an equity stake in, Ocado.
 
It is hoped the talks may lead to Bradford-based Morrisons setting up an online business that Ocado would help operate.

Ocado said if its discussions with Morrisons lead to an agreement this would be complementary to its existing partnership with Waitrose.

“Product would continue to be sourced with Waitrose and Ocado customers would continue to buy exclusively from the existing Ocado, Waitrose and branded ranges,” it said.

In a statement ahead of today’s AGM the firm said: “Ocado has continued to make significant progress as the chairmanship passes from Lord Grade to Sir Stuart Rose.

“The company has continued to grow sales as it benefits from increasing loyalty and spend from existing customers and attracts new shoppers, supported by further expansion in customer demand for online grocery shopping.”

In February operations commenced at Ocado’s customer fulfilment centre at Dordon, Warwickshire, which opened on time and on budget, and this will provide the operational platform for significant future growth,” the firm suggests.

“The board is encouraged by the progress of the business so far this year, and believes the company is well placed to exploit the fast growth in online grocery retailing,” it said.

Meanwhile, retail experts have heavily criticised Morrisons following its announcement yesterday that first quarter like-for-like sales had dipped.

John Ibbotson, director of the retail consultancy Retail Vision, said: “In barely a year, Morrisons has moved from being the dark horse to the also ran of the supermarket stakes. It is being consistently outpaced by the other big three, and the fall in like-for-like sales cannot simply be explained away by March’s bad weather.

“Morrisons has fallen dangerously far behind in the two key growth areas in food retailing – online and convenience stores.

“A pity then than its tie-up with Ocado won’t do online food until next year, and it has a paltry number of convenience stores. Morrisons opened just two this quarter, but Tesco already has more than 2000.

“Morrisons is frantically scrabbling to open 100 convenience stores by the end of the year, but this smacks more of a desperate attempt to catch up rather than any clear vision.

And Phil Dorrell, director of retail consultants, Retail Remedy, said the group’s senior management were now under more pressure to deliver.

“The ambition to grow a multi-channel, multi-format Morrisons says it all,” he said. “The supermarket still has the feel of an analogue retailer in a digital world.
 
“There are lots of good people in Morrisons who have been through adversity before. They urgently need to find a way to get closer to their customer and unleash a marketing campaign that supports this. Sadly they seem a long way from being able to produce the goods. 
 
“The in-store marketing looks dated and does not inspire purchase, non-food is the weakest of the big four by a distance and the introduction of children’s clothing cannot be the answer to Morrisons’ woes.”