Following months of build-up, M&S food started to be delivered by Ocado today.
After M&S paid £750m for a 50% stake in Ocado’s retail division, the two companies have spent the past year preparing for the go-live date of the new service which replaces the online grocer’s tie-up with Waitrose. This has involved developing new products, preparing supply chain processes and providing thousands of data fields and photos for the website.
M&S has developed 750 new products in time for the launch and worked to improve the competitiveness of its everyday grocery items. The Ocado site is now selling a range of 6,000 M&S food products and 800 M&S clothing and home lines. The previous Waitrose range spanned around 4,000 products.
The expanded offering has increased Ocado’s full range to over 50,000 products, a figure it claims is double that of the next largest grocery retailer.
Melanie Smith, Chief Executive of Ocado Retail, said: “This marks the culmination of over a year of hard work by everyone involved and I am so proud of everyone at Ocado Retail and our friends at M&S for such a collaborative partnership.
“We are excited to be bringing the greatest range of products to loyal and new customers across the UK with the winning combination of the country’s fastest-growing grocer and the nation’s most beloved food brand. We know this is the start of something special and as shoppers continue to move online at pace, we look forward to what the future holds.”
Stuart Machin, Managing Director of M&S Food, stated that taking M&S’s full food range online for the first time will be “transformative” for the retailer.
He added: “This is a long-term partnership and in preparation for go-live we have listened intently to customers to deliver an even bigger, better range with more family pack sizes, more scratch cooking ingredients, household staples and organic options. As more families shop for M&S products online, they will see the breadth that M&S food has to offer and we’re confident they will find we remain serious on quality whilst also being serious about value.”
The move coincides with a rapid rise in the number of online shoppers as the pandemic has accelerated the trend, with the channel doubling its share of the market to 14%.
Since the M&S-Ocado joint venture was formed, Waitrose has been beefing up its online operations to ensure it has the capacity to service orders on its own. Its full grocery delivery service now offers over 160,000 weekly slots, compared to 60,000 before the pandemic, with plans underway to increase capacity to 250,000 weekly slots.
After a turbulent 20-year relationship between the two firms, Tim Steiner, Ocado’s Chief Executive, couldn’t help firing a parting shot at Waitrose. “They [Waitrose] have done an advert saying ‘we’ll take it from here’ or something,” Steiner said in an interview with The Sunday Times at the weekend.
“Well, they can’t take it from here because they don’t have the technology, the infrastructure or the systems.”
NAM Implications:
- A real test of whether Ocado or Waitrose/M&S have more pulling power.
- Then it comes down Waitrose shopper willingness to swap for M&S supply.
- The decisive settling point may be some distance away as yet.
