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Time Steiner, Ocado CEO, has reportedly announced that the group plans to retain its stake in Ocado Retail, its joint venture with Marks and Spencer (M&S), according to the Financial Times.
In an interview with the FT Steiner said: “I don’t want to sell the other half right now, so whether [M&S] want it or not is not massively relevant. It’s all symmetrical in terms of rights and obligations on each side, but right now we’re super happy owning half of it.”
The news comes as the £750m deal for a 50% stake in Ocado Retail will complete five years in August, after which both groups can choose to sell their shares to each other.
However, a person familiar with the transaction stated that the companies are under no obligation to do so.
Earlier this year M&S chair Archie Norman reportedly told shareholders that he is “not happy” with the performance of Ocado Retail.
At its latest annual meeting, M&S said that Ocado Retail’s profitability “was clearly not where we want it to be” but said it was committed to the turnaround strategy implemented by the joint venture’s chief executive.
However, Steiner told the FT: “It’s performing well at the moment, it’s really coming back . . . We’re really excited about its future and expect it to increase profitability over time.”
According to Kantar, Ocado.com, which accounts for 1.8% of the total UK grocery market, was the fastest growing among its rivals for the fifth consecutive month, with sales up 10.7% over the 12 weeks to July 7.
Steiner added that the right ownership structure of the joint venture for Ocado Group was “unclear”.
He said: “Is the right model that [Ocado Group] continues to own part of it, M&S owns part of it, maybe some part of it is listed or something like that in the future?
“At some point in the future, when we’ve got multiple cases of [others] using our technology, it may be less important for it to be owned by the same entity. Speaking as a shareholder, I would still like to own a piece of it.”
M&S has been contacted for comment.
