Marks & Spencer joint-venture with Ocado to ‘transform’ online grocery

Upmarket retailer Marks & Spencer has promised to ‘transform’ online grocery in the UK as it unveils its joint-venture with online grocer Ocado, following weeks of press speculation – but no changes are planned to its wine-by-the-case site.

Marks and Spencer

The retailer, which already operates an online wine shop selling predominantly wine by the case, along with selected bottles of fine wines, magnums, wine for gifting, and spirits, confirmed the press rumours of a collaboration yesterday. Today announced it was acquiring a 50% share of the digital player’s UK’s retail business for £750 million, raising £600 million of equity to invest in the joint venture.

The move will allow M&S to accelerate its online ambitions for its food and drink through Ocado’s online technology and experience. The joint-venture will trade as, but sell M&S branded products, including its wines, beers and spirits range.

However a spokesman told db that there were no changes planned for the current online wine and food-to-go proposition as a result of the joint-venture.

The deal, which will share access to M&S’s database of 12million customer, will come into effect by 2020 following the end of Ocado’s sourcing agreement with Waitrose, which cost it £15 m last year.

“The joint-venture (JV) combines the strength of M&S’s brand and its leading food quality and innovation with Ocado’s unique and proprietary technology to create an unrivalled online offer for our customers,” M&S said in a statement. “In bringing the best together the JV will benefit existing and new UK customers, colleagues and suppliers.”

The deal is expected to yield ‘significant potential synergies’ of around £70 million per annum for M&S Food within three years, the retailer announced, on the back of increased buying power, and shared marketing and innovation.

The retailer already operates an online wine and flowers shop, has not confirmed how this would change.

Steve Rowe, M&S CEO said the move was “transformational”.

“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.”

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said Ocado’s decision to partner with M&S would reveal a lot about the e-commerce retailer’s existing customer base.

“How many Ocado shoppers are currently there for the Waitrose products and how many for the delivery service?” he asked.

One Response to “Marks & Spencer joint-venture with Ocado to ‘transform’ online grocery”

  1. A Knight says:

    This is not good news for Ocado customers. M & S is overpriced and lacks the range that Waitrose has.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

We encourage debate in the comments section and always welcome feedback, but if you spot something you don't think is right, we ask that you leave an accurate email address so we can get back to you if we need to.

Subscribe to our newsletters

Key Account Manager

MMI Maldives

Financial Controller

London City Bond
Barking, UK

Duty Manager

The Whisky Exchange
Great Portland Street, London

Spirits Advisor

The Whisky Exchange
London, UK

International Sales Manager

Elixir Distillers
Park Royal, London, UK

Brand Marketing Executive

Elixir Distillers
Park Royal, London, UK

Cellar Door Manager

House of Townend
Melton, North Ferriby, UK

Marketing Assistant

Bancroft Wines Ltd
London, UK

Marketing Manager

The Whisky Exchange
Whitby Avenue, Park Royal, London NW10 7SF

Millésime Bio 2020

27th Jan 2020

Maisons Marques et Domaines Annual Tasting

London,United Kingdom
29th Jan 2020

Austrian Wine Tasting

London,United Kingdom
3rd Feb 2020
Click to view more