In a protracted £190 million battle over its home delivery joint venture, Ocado has discreetly absolved Marks & Spencer.
According to City AM, FTSE-250 Ocado has given up on pursuing the payout from M&S that it felt was due as part of their joint venture.
When Ocado Retail was first established, the two businesses split the company equally, and M&S paid Ocado £560 million in advance for its delivery services.
Due to the venture’s poor performance, M&S failed to pay the additional £190.7 million that was due based on unspecified benchmarks.
Ocado had previously threatened to sue M&S over the payment, stating that it had a “strong negotiating position” to reach a resolution and threatening to use “all available means” to get the money.
In 2024, CEO Tim Steiner told shareholders, “We are very confident we are owed a substantial sum of money.”
However, it is now believed that the company has given up on the £190 million windfall, focusing instead on its intentions to “realise the potential” of Ocado Retail.
“Ocado Retail continues to be the UK’s fastest-growing grocer, and we were pleased to announce in last week’s half-year results that the business is now profitable across all key measures,” an Ocado representative stated.
In the upcoming months, we anticipate building on this momentum by increasing client order capacity while sustaining robust growth. We are still committed to achieving the enormous potential of the Ocado Retail business in collaboration with our joint venture partners at M&S.
Ocado founder to resign M&S has rejected the idea of growing this collaboration. The Times, which initially revealed that Ocado had abandoned its pursuit of the payment, said that the store is requesting improved contract conditions and technical advancements from Ocado.
“We have a good relationship with Ocado,” an M&S representative stated. As you can anticipate, we have frequent conversations and collaborate to fully fulfil our partnership’s potential. These conversations are constructive.
After a difficult start, Ocado Retail has started to pick up steam, turning a £12 million pre-tax profit in the six months ending in April thanks to an increase in average spend and client counts.
However, after closing some of its North American businesses, the FTSE 250 company is now having problems finding new partners in its warehouse technology sector.
After a conflict with chairman Adam Warby in the boardroom, Steiner, who co-founded the company in 2000, revealed earlier this month that he will leave his position as CEO and become a founder in around 18 months.
On Tuesday, Ocado shares increased by 2.3% to 189p.
Ocado has given up trying to compel Marks & Spencer to give up a £190 million payment related to their joint online grocery business.
After the pair’s £750 million Ocado Retail collaboration fell short of the initial goals set out in 2019, M&S is not anticipated to make a payment.
Last year, Ocado warned that it would use “all available means” to fight for the money, raising the possibility of legal action against M&S.
The high-street retailer was required to pay Ocado a final installment of £190.7 million as per the rules of the joint venture, which enabled M&S to sell food online for the first time.
This, however, was contingent upon Ocado Retail fulfilling unspecified performance goals until November 2023, which it did not.
Ocado’s CEO, Tim Steiner, had maintained that the amount should still be paid because the conditions of the agreement should have taken into consideration things like the Covid-19 pandemic.
The Times reports that the sides have agreed to put a stop to their disagreement, therefore no money will be exchanged.
But in a new standoff, M&S is said to have declined to commit to expanding volumes at its current locations or constructing additional facilities unless Ocado accepts better business conditions.
Due to declines in sales in its technology and robotics division, Ocado reported a £33 million loss after tax in the first half of this year earlier this month, down from a £605 million profit in the same period last year.
In the first half of 2026, its retail joint venture reported sales of about £1.8 billion, up 15% from the same period the year before.
The findings were released a few days after Mr. Steiner, who co-founded the company 26 years ago with two former Goldman Sachs colleagues, announced he would retire in 2028 due to a purported plot to oust him.
So far this year, Ocado’s stock price has dropped by more than a fifth. In contrast, M&S has increased by over 19 percent.
“Ocado Retail continues to be the UK’s fastest-growing grocer, and we were pleased to announce in last week’s half-year results that the business is now profitable across all key measures,” an Ocado representative stated.
In the upcoming months, we anticipate building on this momentum by increasing client order capacity while sustaining robust growth. We are still committed to achieving the enormous potential of the Ocado Retail business in collaboration with our joint venture partners at M&S.
“We have a good relationship with Ocado,” an M&S representative stated. As you can anticipate, we have frequent conversations and collaborate to fully fulfil our partnership’s potential. These conversations are constructive.