M&S acquires 50% of Ocado Retail

As part of its plans to extend the reach of its grocery delivery business, Marks & Spencer (M&S) has now acquired 50% of Ocado Retail Ltd.

The moves comes as part of its joint venture (JV) with Ocado Group Plc, where M&S will use the Ocado UK grocery retail network and the Ocado Smart Platform (OSP) technology.

Ocado will benefit from accessing M&S Food’s 12 million grocery customers who together account for a third of UK grocery spend. To date however those customers have not been able to access the full range of M&S Food’s goods except those at around 12 stores. From September 2020, some 75% of the UK population will be within range of an offering of more than 6500 lines. They will also be able to access Ocado’s exclusive brands, popular branded goods (unlike shopping at M&S) and Ocado’s own label products.

Following today’s completion, and in line with the JV agreement, Ocado Group Plc has appointed Melanie Smith, currently Strategy Director at M&S, as CEO of Ocado Retail Ltd, who will be in post from 1st September.

Steve Rowe, CEO, M&S, 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. Through its unique 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.”

Tim Steiner, Chief Executive Officer, Ocado, said: “Ocado Retail’s future, as part of a joint venture with M&S, is full of opportunity. 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.”

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