According to the latest news, Mark & Spencer is planning to own 50% shares of Ocado. The retail giant is planning to make the purchase for around 750 million pounds. The joint venture will allow Mark & Spencer to sell its groceries under the name of Ocado. The venture will allow customers to choose from a vast range of products and can switch either to Ocado or Mark and Spencer. Furthermore customers can also go for Waitrose.com and can do online shopping.
According to M & S’s chief executive, after the joint venture customers will be able to purchase cheaper goods as the cost of Waitrose products are very high. The deal will also showcase some of Ocado’s products in the market. Speaking to the press Mr. Rowe said that M & S is doing the venture as it has no online delivery system. The chief executive further promised that in future around 33% of M & S’s business will be done over the internet.
On the contrary, Neil Wilson questioned that whether it would make much difference if M & S will start to do online business. He further raised the issues regarding the basket size of M & S which is too small. In the upcoming future Ocado is planning to develop a robotic warehouse and focusing to serve giants like Kroger and Groupe Casino.
Analysts further foretell that the joint venture has more benefits for Ocado than M & S, since the former was up in early trading by 4% in comparison to M & S which is down by 8%. On an average the basket price at M & S is around 13 pound on the contrary Ocado has wide range of audience as it was in collaboration with Waitrose in the past. The chairman of M & S considered analysis by experts as shortsightedness; he said that analysts are lagging in long-term vision.