Waitrose hits out at Ocado

 
Marion Dakers
THE HEAD of Waitrose has warned Ocado that he will not tolerate a deal with a rival supermarket if it encroaches on long-standing agreements with his company.

Waitrose is contracted to supply Ocado with produce until 2020, with a break clause in 2017.

But Waitrose managing director Mark Price has raised concerns that Ocado’s ongoing talks to help Morrisons set up its own online outlet could breach their existing deal.

Price told the Telegraph that he would “never knowingly sign a contract with Ocado that agreed to them working with another retail competitor”.

“We have moved to defcon one [on online expansion] because we don’t know where this is going to end up and we are now working on adding considerable extra capacity to Waitrose.com,” he added.

Ocado said at last week’s shareholder meeting that it was continuing discussions with Morrisons about an online deal, but that any arrangement “would be complementary to Ocado’s existing partnership with Waitrose, which would be unaffected by any potential agreement with Morrison”.

Ocado’s shares spiked in March when it confirmed discussions with Morrisons that centred around its online know-how, as Morrisons tries to make a long-awaited push into internet shopping.

Meanwhile, almost a quarter of the firm’s shareholders voted against its remuneration report at Friday’s AGM.

More than 13 per cent voted against the firm’s long-term incentive plan, after the firm declined to give details on the targets that staff needed to hit to earn these payouts.

TIMELINE: OCADO’S LONG-STANDING LINKS TO WAITROSE
2000
Ocado founded by three former Goldman Sachs bankers: Tim Steiner, Jason Gissing and Jonathan Faiman.

2002
Ocado signs its first deal with Waitrose, allowing it to sell and deliver the supermarket’s products through its online outlet.

Ocado starts deliveries, beginning in St Albans and spreading to north London within a year.

2007
Ocado reaches positive Ebitda.

May 2010
Ocado extends its supply deal with Waitrose through to 2020, allowing Ocado to continue selling Waitrose-branded produce online.

JULY 2010
Ocado cuts the price range of its IPO by a fifth to 180p to 200p, but gets the float away despite the choppy equities market.

Stock falls 12 per cent on first day of full trading, closing at 159p.
As part of the IPO, the John Lewis Pension Fund sells down its stake from 26.5 per cent to 10.4 per cent. Waitrose is part of the John Lewis Partnership.

SEPTEMBER 2010
Ocado relaunches its own-label produce, distancing it from the Waitrose brand.

FEBRUARY 2011
Shares hit an all-time high of 285p, after posting a quarterly profit, though for the full year it posted a £12.2m pre-tax loss.

Later that month, the John Lewis Pension Fund sells off its remaining 10.4 per cent stake in Ocado, sending the supermarket’s shares down 10 per cent.

JUNE 2011
Waitrose launches a national advertising campaign for its online shopping business. The ads run in London the following month, when Waitrose’s agreement not to compete with Ocado comes to an end.

DECEMBER 2011
Shares in Ocado plummet 17 per cent to a record low of 53p after a surprise profit warning.

JANUARY 2012
Finance boss Andrew Bracey resigns to jon recruiter Michael Page. Replaced in September by Duncan Tatton-Brown.

JUNE 2012
Ocado shares dive when it admits it had missed out on a sales boost during the Jubilee celebrations, even though gross sales in the half-year were up 12 per cent.

NOVEMBER 2012
Ocado raises £36m in a share placing and extends its £100m debt facilities.

JANUARY 2013
Former M&S boss Sir Stuart Rose announced as Ocado’s new chairman, starting in May.

FEBRUARY 2013
Annual pre-tax losses narrowed to just £600,000.

Second distribution centre opens, giving Ocado greater access to the rest of the UK – and more of Waitrose’s customers.

MARCH 2013
Morrisons and Ocado confirm talks about a possible online tie-up.