Ocado’s search for a potential successor to founder and chief executive Tim Steiner appears to be gathering pace, following reports that the online grocery technology business has approached external candidates about the role.

The company issued a statement this week confirming that its chief executive and board “continually engage in long-term succession planning” and “regularly engage with potential candidates”, after Sky News reported that talks were underway to identify a future replacement for Steiner.

The wording has raised eyebrows in the City, with the reference to Steiner’s involvement suggesting a more unusual succession process than would typically be seen at a listed business, where chief executive appointments are normally overseen by the chair and non-executive directors.

One name reported to have been approached is Niklas Heuveldop, chief executive of Vonage, the Ericsson-owned cloud communications business. It is not yet clear whether any appointment is close, or whether Heuveldop remains in serious contention.

The reports come at a difficult moment for Ocado, whose shares have fallen sharply since their pandemic-era peak. The company’s stock traded above £29 in September 2020, when investors were enthusiastic about the long-term potential of its grocery technology platform. This week, shares closed at 178.1p.

That collapse has increased pressure on Steiner, who co-founded Ocado and has led the business through its transformation from an online grocer into a technology and logistics provider for retailers around the world.

While Ocado has continued to promote the strength of its automated warehouse technology and international partnerships, investors have become increasingly impatient with its path to sustainable profitability. Disappointing developments in North America over the past year have added to concerns over the speed and scale of its growth.

There have been some more positive signs. Ocado recently struck a new partnership with Asda in the UK, while further international deals are understood to be under discussion. However, the market’s reaction to the succession reports suggests shareholders are not yet convinced that the current strategy can deliver the returns long promised by the business.

The company’s shares fell around five per cent on the day it confirmed it was engaging with possible chief executive candidates. While that hardly amounts to a ringing endorsement of change, it does underline the uncertainty surrounding the business as it considers life beyond its long-serving founder.

A new chief executive would inherit a sizeable in-tray. Ocado remains locked in a long-running dispute with Marks & Spencer over their joint venture, while its technology division needs to rebuild momentum with existing and prospective retail partners.

For Steiner, who has been one of the most influential figures in UK online grocery, the question is no longer whether Ocado has changed retail. It clearly has. The more pressing issue is whether a fresh leadership team is now needed to turn its technology promise into the profitable growth investors have been waiting for.

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