‘Issues’ with Ocado partnership, M&S admits

The Marks and Spencer chairman has conceded that Ocado is struggling to meet customer demand, ten months after the companies signed a multi-million delivery deal.

According to The Telegraph, Archie Norman said that Ocado needed to improve its network, which does not cover large tracts of the UK.

“I’m not saying there aren’t issues,” he told investors.

“We have to position our [food] business right for [online], and make sure that Ocado has the right growth in place.

READ MORE: Grocery startups to stay small, Ocado boss predicts

“It doesn’t cover a lot of the country, there is a lot of investment due to it.”

Last week, Ocado revealed it was increasing capacity to take on more customers.

It is the latest of the Marks and Spencer’s e-commerce woes, having struggled to adapt to online shopping like other retailers.

The supermarket signed a £750 million agreement with Ocado in September, buying half of the online grocer in the process.

It cancelled its partnership with delivery platform Deliveroo in the same month.

Ocado packs goods at robotic warehouses which take a long time to build, so scaling up its delivery network is expected to be slow.

Norman said: “Ocado can’t serve a lot of Marks and Spencer customers – they are still building more capacity.”

Nevertheless, he stressed that the platform was “generating good profit” and “we’re investing in it”.

Ocado has already drawn criticism for its high levels of investment this year.

Some blamed this for its poor showing in February, when it became the FTSE 100’s worst performing company.

The grocer, which this month announced a £23 million loss, has recently started supplying Spanish retailer Alcampo.

FinanceSupermarkets

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