Ocado in talks with Marks & Spencer as Waitrose partnership nears end

Ocado has held secret talks with Marks & Spencer over the prospect of launching its own food delivery service that could see its long-standing partnership with Waitrose come to an end.

Ocado has been synonymous with the Waitrose brand for the last 20 years, but the deal between the two companies is set to end on September 2020 – leaving the door open to rivals like Marks & Spencer to agree a new tie-up deal with the food delivery company.

Waitrose to part ways with Ocado

Several reports have surfaced that suggest that John Lewis Partnership, which owns Waitrose, is looking to part ways with Ocado, a company that it once held shares in.

The decision is the by-product of what has been a rather tumultuous relationship between the two companies, but the move is mostly driven by Waitrose launching and expanding its own delivery operation, making its partnership with Ocado redundant.

One of the founders of Ocado Jason Gissing once told the Guardian that its former owners at John Lewis were ‘a complete pain in the arse to deal with’ and that members from both companies frequently failed to see eye-to-eye.

Marks & Spencer to partner with Ocado

According to a report by the Mail on Sunday, a tie-up with Ocado is part of a wider plan by Marks & Spencer’s Chairman Archie Norman to change the retailers poor fortune of late. The report claims that the retailer is considering acquiring major distribution centres and delivery vehicles from Ocado to implement its new growth strategy.

Marks & Spencer’s decision to partner with Ocado is a deal that many analysts see as a long time coming, with the retailer one of the last in the sector to offer a food delivery service for customers.

The online grocery market was worth around £11.4 billion in 2018 and is expected to grow by 52% to reach £17.3 billion by 2023, according to data compiled by the food and grocery research organisation IGD.