Ocado and M&S begin their online grocery shopping joint venture this week in a move that M&S hopes will revitalize the brand. Online shopping has doubled its share of the UK market to 14% since the virus outbreak and Ocado expects that figure to reach 30%.
The two companies had different fortunes since the Covid outbreak with Ocado registering sales growth of 40% during the lockdown, whilst M&S is moving to cut 7,000 jobs after merchandise sales dropped almost 50% year-on-year.
The launch of the joint venture had to wait until September 1st due to Ocado’s existing arrangements with Waitrose and boss Tim Steiner fired a parting shot at the company ahead of the new launch.
Steiner said: “They have done an advert saying ‘we’ll take it from here’ or something. Well, they can’t take it from here because they don’t have the technology, the infrastructure, or the systems. To put it bluntly, they don’t understand the online market like we do.”
M&S paid £750m last year for a 50% stake in Ocado and the path to further market share will be tougher once the lockdowns and virus fears disappear.
Ocado Technical Outlook
The Ocado share price is up over 100% since the March lows and the stock has broken higher out of a price channel, before finding support for the next leg higher. The 2247 price is now the first meaningful support for Ocado, but another test of that level could see the top of the price channel tested again at 2000.