Ocado

Ocado Group plc
Public limited company
Traded as LSE: OCDO
Industry Internet retail
Founded April 2000 (2000-04)[1]
Founder Jonathan Faiman
Jason Gissing
Tim Steiner
Headquarters Hatfield, Hertfordshire, U.K.
Area served
 South East England, Midlands, North West England, North Wales, the South Coast of England and most of Yorkshire, South West England and South Wales
Key people
 Stuart Rose, Chairman
Tim Steiner, CEO
Services Groceries, consumer goods
Revenue £1,463.8 million (2017)[2]
£14.7 million (2017)[2]
£1.0 million (2017)[2]
Website www.ocado.com

Ocado is a British online supermarket.[3] In contrast to its main competitors, the company has no chain of stores and does all home deliveries from its warehouses. Ocado has been voted the best online supermarket in the UK by Which? readers every year since 2010.[1][4] The company was floated on the London Stock Exchange on 21 July 2010, and is a member of the FTSE 100 Index.

History

An Ocado delivery in progress

Ocado was founded in April 2000 by Jonathan Faiman, Jason Gissing and Tim Steiner, former merchant bankers with Goldman Sachs. Ocado was launched in January 2000 as a concept and started trading as a business in partnership with Waitrose in January 2002. When the company first started, Faiman, Gissing and Steiner ran every part of the business themselves.[5]

In September 2006, Michael Grade became non-executive chairman of Ocado, shortly after Goldman Sachs were appointed as financial advisers, fuelling speculation which had already started about a listing for the company.[6] In November 2008, the John Lewis Partnership transferred its shareholding of 29% into its staff pension fund. It also agreed a five-year supply deal with the business, replacing its previous one-year rolling deal.[7] This deal was replaced in May 2010 with a 10-year branding and supply agreement.[8] Procter & Gamble took a 1% stake in the company the same year.[9] In February 2011, the John Lewis pension fund sold off its entire Ocado shareholding.[10]

On 13 July 2009, Ocado released their first app for the iPhone. The app, called 'Ocado on the Go', allows users to do their grocery shopping without the need of a PC.[11] On 19 April 2010, the company extended the app to Android devices. The Android app has a number of features that the iPhone app does not have, including the ability to control the app using only the voice.[12] In 2015, Ocado launched the first grocery app for the Apple Watch.[13] In July 2010, following considerable speculation, Ocado undertook a stock market Initial public offering.[14]

In November 2017, Ocado's shares upped by 20% following the fulfillment of a deal with the French Casino Group.[15]

In January 2018, Ocado completed negotiations for a deal with Canada's second largest supermarket chain Sobeys, owned by Empire Company. Michael Medline, CEO of Empire and Sobeys, said its e-commerce (robotics system for home deliveries) business would start in approximately two years.[16][17][18]

In May 2018 Ocado signed a deal with Kroger, the US retail company, to build up to 20 Customer Fulfillment Centres (CFCs) using Ocado's automated technologies.[19]

Operations

Ocado's warehouse in Hatfield

Ocado's products include own brand groceries from the Waitrose supermarket chain as well as their own Ocado brand, but also a selection of name brand groceries and other items, including flowers, toys and magazines.[20] A range of Carrefour's products are also sold via Ocado.[21]

In August 2017, Ocado launched an app for Amazon’s Alexa voice assistant, that will allow users to add products to an existing Ocado order or basket via voice command. The company states it is the first UK supermarket to launch an app for Alexa.[22]

Morrisons online deliveries

Since January 2014, Ocado have been delivering online groceries for one of their main grocery rivals Morrisons supermarkets, using Ocado's network of depots to deliver Morrisons groceries to online customers. The fulfilment of Morrisons.com grocery website customer orders comes from Ocado’s Dordon Customer Fulfilment Centre (CFC) in the Midlands, with deliveries brought to the customer's doorstep via Morrisons liveried fleet. Morrisons made an initial capital payment of up to £170m to Ocado to acquire the Dordon site and associated mechanical handling equipment, as well as a licence and integration fee. A further £46m was invested to expand Dordon in order to accommodate Morrisons range, integrate with Morrisons systems and establish a network of delivery spokes. On an annual basis, Morrisons pay service costs and a contribution to research and development expenditure.[23]

Name

Jez Frampton, CEO of Interbrand and non-executive director of Ocado, claims the name "Ocado" is "a made-up word, intended to evoke fresh fruit". Neil Taylor, an Interbrand consultant, stated that the name was a variant on the avocado fruit.[24]

See also

References

  1. 1 2 "Ocado History". Ocado. 2011. Retrieved 2 February 2014.
  2. 1 2 3 "Preliminary Results 2017" (PDF). Ocado. Retrieved 28 March 2018.
  3. ↑ Pratley, Nils (17 May 2013). "Divorce from Waitrose now the only risk for Ocado". The Guardian. UK. Retrieved 9 January 2013.
  4. ↑ "Supermarkets compared - Best and worst supermarkets - Leisure - Which? Home & garden". which.co.uk. Retrieved 31 March 2015.
  5. ↑ "Ocado Factsheet". Just-food, Aroq Ltd. 2008. Retrieved 28 October 2008.
  6. ↑ "Ocado prepares for 2006 flotation". The Guardian. 24 December 2004. Retrieved 10 April 2016.
  7. ↑ "Ocado gets five-year John Lewis backing". Daily Mail. London. 8 November 2008.
  8. ↑ "Waitrose and Ocado Announce New 10 Year Branding and Sourcing Deal". John Lewis Partnership. Archived from the original on 16 July 2011.
  9. ↑ "Ocado delivers a £140million windfall". Daily Mail. London. 17 June 2009. Retrieved 21 July 2010.
  10. ↑ Wood, Zoe; Kollewe, Julia (12 February 2011). "Ocado share sell-off delivers £152m to John Lewis pension fund". The Guardian. London. p. 45.
  11. ↑ "devoted to your shopping". Ocado. Retrieved 21 July 2010.
  12. ↑ "Ocado Android app allows mobile grocery shopping using voice". Internet Retailing. 19 April 2010. Retrieved 21 July 2010.
  13. ↑ Sabharwal, Veebs. "Ocado Technology launches world's first grocery shopping app for Apple Watch". Retail Gazette. Retrieved 16 August 2016.
  14. ↑ "Ocado's IPO Buyers Include Fidelity, Other Early Investors". Wall Street Journal. 29 July 2010. Retrieved 10 April 2016.
  15. ↑ "Ocado shares soar after French deal". BBC News. 28 November 2017. Retrieved 28 November 2017.
  16. ↑ "Sobeys to expand online grocery business by tying up with Britain's ecommerce giant Ocado". Financial Post. June 24, 2014. Retrieved September 27, 2018.
  17. ↑ "Sobeys predicts e-commerce dominance with Ocado". Supermarket News. March 14, 2018. Retrieved September 27, 2018.
  18. ↑ "Loblaw plans to 'blanket' Canada with e-commerce options by the end of 2018". Globe and Mail. May 3, 2014. Retrieved September 27, 2018.
  19. ↑ "Ocado shares rocket 44% on US tech deal". BBC News. 2018-05-17. Retrieved 2018-05-19.
  20. ↑ Davey, James (7 November 2008). "Update 2-John Lewis moves Ocado stake to pension fund". Reuters. Retrieved 21 July 2010.
  21. ↑ "The French connection: Ocado strikes deal to deliver groceries from across the Channel to UK customers". Daily Mail. 27 June 2011. Retrieved 7 July 2011.
  22. ↑ Lomas, Natasha. "Ocado launches Alexa app for grocery shopping by voice | TechCrunch". Retrieved 29 August 2017.
  23. ↑ "Morrisons Announce Deal With Ocado". FMC News.
  24. ↑ Mark Kleinman on marketing and the City: Can Ocado deliver more? Brand Republic, 22 September 2009
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