Blog: Katy AskewSpotlight returns to possible Ocado-Waitrose rift

Katy Askew | 17 June 2013

Speculation cracks could be emerging in what, to date, has been a winning online partnership between Ocado and Waitrose continue to mount here in the UK.

The weekend papers again emphasised Ocado is ramping up its own-label focus, with commentary focusing on the possibility the internet grocer could be moving to reduce its reliance on Waitrose.

A spokesperson for Ocado confirmed today (17 June) the group is pressing ahead with previously-announced plans to increase its own-label sales to 30% of total revenue. Currently, about 20% of Ocado sales are own label.

"The number of Ocado own label lines increased from around 450 to 500 or so last year, which has obviously helped support strong growth in own label sales. If you look online at the moment, that number does not appear to have materially changed. The point is not the number of lines per se it is their increased penetration in the mix," the spokesperson said. 

The spokesperson declined to provide further details on what categories Ocado is focusing on or how quickly it plans to complete the transition to a higher proportion of own label sales. "These details simply aren't available yet," the spokesperson said.

Ocado acts as a delivery arm for Waitrose - carrying Waitrose own-label products on its website - and the combination has proven mutually beneficial for both groups. However, following an announcement Ocado has entered into an agreement to help Morrisons develop its online presence, rumours have mounted that divisions are growing.

Ocado has said its new relationship with Morrisons will not have an impact on its dealings with Waitrose. For its part, Waitrose has declined to comment on what - if any - impact the Morrisons tie-up will have on its business, or its relationship with long-term partner Ocado.

The existing deal between Waitrose and Ocado lasts until 2020. However, with a clause in the contract providing Waitrose with the opportunity to walk away in 2017, any ranging move from Ocado is likely to get tongues wagging.


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