Business

Ocado still tight-lipped on mystery deal

Ocado van Image copyright PA

Online grocer Ocado is remaining tight-lipped over its deal with a mystery overseas European retailer, but says it will be the "first of many".

Chief executive Tim Steiner said the firm was pursuing conversations with "multiple" international companies.

It also said Amazon's recent takeover of US chain Whole Foods was a "positive catalyst" for it to boost its international presence.

Ocado had been under pressure over its delay in achieving overseas expansion.

In June, it announced a long-awaited overseas deal with an unnamed European retailer, saying it was going to help it set up an online grocery delivery service.

This also helped bolster its share price, reassuring investors who were growing increasingly sceptical of its strategy.

The retailer has been slow to branch out internationally, missing a self-imposed deadline in 2015.

'Online aspirations'

Also last month, retail giant Amazon made its biggest push into traditional retailing by buying Whole Foods in a £10.7bn deal.

The shares of rival grocers fell, but Ocado's stock went up because it was felt the deal signalled a future partnership between the two or a possible takeover.

There has been much speculation that Ocado could be a potential takeover target for Amazon, which is seeking to expand its home delivery grocery business.

Mr Steiner said: "We continue to progress conversations with multiple retailers internationally to use the Ocado Smart Platform and believe that recent industry developments such as the announced acquisition of Whole Foods by Amazon will be a positive catalyst in advancing these discussions."

He added: "Grocery retailing is changing and we are ideally positioned to enable other retailers to achieve their online aspirations."

The retailer, which also works with Morrison and Waitrose, said its half yearly pre-tax profits fell by £1.7m to £7.7m, because of the opening costs of its third warehouse in Andover and investment in its delivery systems.

Retail revenue grew 12.5% to £659.6m, while its customer base increased 12.7% year-on-year to 600,000 in the six months to 28 May 2017.

Ocado's shares rose 2.3% to 296p in early trading.

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