Shares of M&S and Ocado Soar Amid Tie-Up Rumors

On Monday, British retailer Marks & Spencer and online supermarket Ocado witnessed a spike in their shares on the back of a report published in a newspaper on Sunday, which mentioned that they were planning to roll out an M&S food delivery service.

There have been talks going on between the executives of M&S and Ocado executives over past some time now. Following the report, shares in M&S witnessed a 2.6% raise, whereas, Ocado shares rose 6.7%, however, none of the companies have commented on the report so far.

Currently, Ocado has a supply and delivery collaboration with Waitrose, the John Lewis Partnership owned supermarket. The contract will expire in 2020. According to the recent report carried by a newspaper, the deal on the table is likely to put M&S in a position to play the part of Waitrose in the Ocado business. Waitrose declined to comment on the same.

On January 10, when M&S gave an update on Christmas trading, Steve Rowe, the retailer’s chief executive, was asked about the group’s plans for a full online grocery shopping service. He smartly addressed the media saying that presently the retailer’s basket size isn’t sufficient to cater to that. He added that around 41% of their customers were shopping for today/tonight and that’s something that won’t fit in an online proposition, and further mentioned that people seek a different offer from them.

However, somewhere Rowe hinted a change in their future action plan, saying that he was aware of the trend to shift online with food and was considering that too.

M&S started experimenting with home delivery back in 2017, when it started a trial in north London to offer some ready meals.  Currently, M&S deals in alcoholic drinks, wedding cakes, and party food for collection, but lacks a robust delivery network like that of Asda, Tesco, Sainsbury’s or Morrison.

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