Waitrose this morning (17 May) refused to be drawn on news long-time online partner Ocado had struck an agreement to help rival grocer Morrisons launch its own home delivery service.
“We’ll be looking at the deal in detail. We have no further comment,” a Waitrose spokesperson told just-food today after Morrisons and Ocado announced a distribution and technology deal.
Morrisons and Ocado first revealed in March they were in talks over a possible venture. This morning, the two sides announced a venture that will see Morrisons start an online food service in January.
The possibility of a deal between Morrisons and Ocado had proved controversial due to the online specialist’s existing partnership with Waitrose.
Waitrose’s parent John Lewis Partnership was an early investor in the online retailer. John Lewis is no longer a shareholer but Ocado still has Waitrose own-label products in the range of lines it offers. However, Waitrose launched its own home delivery service for customers within the M25 – the motorway that circles London – in 2011.
Mark Price, the managing director of Waitrose, expressed concern over at the weekend at the prospect of Ocado working with another UK retailer in the fast-growing online channel.
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Announcing the deal today, Ocado CEO Tim Steiner insisted the deal with Morrisons would not affect Ocado’s existing partnership with Waitrose.
“Our customers will see no change to the service they receive from Ocado as a result of this agreement. We will continue to source products under our long term agreement with Waitrose, and our customers will continue to benefit from the existing high levels of service, wide range of products and competitive prices that they currently enjoy,” he said.
However, some analysts believe Waitrose could look to enact a break clause in its current deal with Ocado. That agreement, which runs until 2020, includes a clause that could allow Waitrose to walk away in 2017.
“Ocado has struck what looks to be an excellent deal with Morrisons. However, we think that it increases the risk that Waitrose will walk away from its supply arrangement in 2017,” Panmure Gordon analyst Philip Dorgan said today.
Shares in Ocado were up 29.27% at 261p at 11:04 BST, having risen by more than 40% earlier in the day.
Morrisons’ shares had climbed 1.49% at 11:05 BST to 286.8p.