Ocado Explained

Ocado Group plc
Former Name:Ocado Group Limited (2009–2010)[1]
Type:Public
Area Served:United Kingdom
Industry:Internet retail
Revenue: £2,825.0 million (2023)[2]
Operating Income: £(351.0) million (2023)
Net Income: £(387.0) million (2023)
Foundation:[3]
Location:Hatfield, Hertfordshire, England, UK

Ocado Group plc is a British business based in Hatfield, England, which licenses grocery technology. It also owns a 50% share in the UK grocery retail business Ocado.com (the other 50% is owned by UK retailer Marks & Spencer). The company is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

Ocado was established by Jonathan Faiman, Jason Gissing and Tim Steiner, former merchant bankers with Goldman Sachs, as L. M. Solutions, in January 2000.[4] Ocado started trading as a business in partnership with Waitrose, part of the John Lewis Partnership, in January 2002.[5]

In September 2006, Michael Grade became non-executive chairman of Ocado.[6] In November 2008, the John Lewis Partnership transferred its shareholding of 29% into its staff pension fund.[7] In May 2010 the John Lewis Partnership entered into a 10-year branding and supply agreement with Ocado.[8] In February 2011, the John Lewis pension fund sold off its entire Ocado shareholding.[9]

On 13 July 2009, Ocado released its first app for the iPhone. The app, called 'Ocado on the Go', allows users to do their grocery shopping without the need for a PC.[10] On 19 April 2010, the company extended the app to Android devices.[11]

In July 2010, Ocado undertook a stock market Initial public offering.[12]

In January 2014, Ocado started providing website, warehousing and delivery services for one of their main grocery rivals, Morrisons supermarkets, allowing them to operate online using Ocado's network of depots to deliver Morrisons groceries to online customers.[13]

On 14 June 2014, the company changed its name from L. M. Solutions to Ocado Retail.[14]

In 2015, Ocado launched the Ocado Smart Platform, its proprietary end-to-end solution for operating retail businesses online.[15] The company went on to sell the platform to the French Casino Group in November 2017,[16] to the Canadian supermarket chain Sobeys in January 2018,[17] [18] [19] to the US retail company Kroger in May 2018,[20] and to the Australian retail business Coles Group in May 2020.[21]

In the early morning of 5 February 2019, Ocado's customer fulfilment centre (CFC) in Andover, Hampshire, which handles 10 per cent of its fulfilments, caught fire. The fire continued to burn the following day, engaging more than 25 fire engines and 300 firefighters from multiple fire services, as far as Kent. A 500-metre exclusion zone was set up and residents as far as away were to be evacuated as a precaution. The fire burned for more than 3 days, with the roof collapsing in the process.[22] [23] [24] [25] The fire was found to have started due a fault in a battery charging unit, and was exacerbated by worker responses.[26] The warehouse was rebuilt, and was operational by August 2021.[26]

On 27 February 2019, Ocado and Marks & Spencer announced a joint venture, whereby Marks & Spencer agreed to pay £750M for a 50% share in Ocado's UK retail business, Ocado.com.[27] Part of the amount to be paid by M&S depended on the performance of the joint venture in the years up to and including 2023.[28] Ocado ceased selling own brand groceries from the Waitrose supermarket chain in September 2020.[29]

Activities

The company licenses Ocado Smart Platform, a proprietary solution for operating retail businesses online. It also owns a 50% share in the UK retail business, Ocado.com (the other 50% is owned by UK retailer Marks & Spencer).[30] In 2023, the retail business accounted for around 90% of group revenue.

Since 2014, Ocado has supported Code For Life, a not-for-profit organisation which helps children learn computer programming.[31]

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 derived from avocado.[32]

Notes and References

  1. Web site: 2009-12-08 . Ocado Group plc overview - Find and update company information - GOV.UK . 2024-02-25 . . en.
  2. Web site: Annual Report for the 53 Weeks to 3 December 2023. Ocado Group . 29 February 2024.
  3. Web site: Ocado History . 2011 . Ocado . 2 February 2014.
  4. Web site: Ocado Retail Limited filing history - Find and update company information - GOV.UK . 2023-09-23 . find-and-update.company-information.service.gov.uk . en.
  5. Web site: Ocado Factsheet. Just-food, Aroq Ltd. 2008. 28 October 2008.
  6. Web site: Ocado prepares for 2006 flotation. 24 December 2004. The Guardian. 10 April 2016.
  7. Web site: John Lewis nets £220m from selling Ocado stake. The Telegraph. 12 February 2011. 7 February 2019.
  8. Web site: Waitrose and Ocado Announce New 10 Year Branding and Sourcing Deal. John Lewis Partnership. dead. https://web.archive.org/web/20110716073246/http://www.johnlewispartnership.co.uk/Display.aspx?MasterId=276b5ad3-7284-4182-b2a3-418471273212&NavigationId=553. 16 July 2011. dmy-all.
  9. News: Zoe. Wood. Julia. Kollewe. Ocado share sell-off delivers £152m to John Lewis pension fund. The Guardian. London. 12 February 2011. 45.
  10. Web site: devoted to your shopping. Ocado. 21 July 2010.
  11. Web site: Ocado Android app allows mobile grocery shopping using voice. Internet Retailing. 19 April 2010. 21 July 2010.
  12. Web site: Ocado's IPO Buyers Include Fidelity, Other Early Investors. 29 July 2010. Wall Street Journal. 10 April 2016.
  13. News: Ocado tie-up to help Morrisons start selling groceries online. Moulds. Josephine. 2013-05-17. The Guardian. 2019-07-08. en-GB. 0261-3077.
  14. Web site: OCADO RETAIL LIMITED filing history - Find and update company information - GOV.UK . 2023-09-23 . find-and-update.company-information.service.gov.uk . en.
  15. Web site: Ocado Smart Platform Explained - Ocado Group plc Annual Report 2014. results14.ocadogroup.com. 2019-07-08.
  16. News: Ocado shares soar after French deal. 28 November 2017. BBC News. 28 November 2017. en-GB.
  17. News: Sobeys to expand online grocery business by tying up with Britain's ecommerce giant Ocado. Financial Post. 24 June 2014. 27 September 2018.
  18. Web site: Sobeys predicts e-commerce dominance with Ocado. Supermarket News. 14 March 2018. 27 September 2018.
  19. News: Loblaw plans to 'blanket' Canada with e-commerce options by the end of 2018. Globe and Mail. 3 May 2014. 27 September 2018.
  20. News: Ocado shares rocket 44% on US tech deal. 17 May 2018. BBC News. 19 May 2018. en-GB.
  21. Web site: Sword . Alex . Ocado tech heads to Australia . eDelivery . eDelivery.net . 4 March 2022.
  22. News: Ocado robots at Andover warehouse 'hampered' firefighters. Gibbons. Katie. 2019-02-09. The Times. 2019-03-26. en. 0140-0460.
  23. News: Ocado warehouse fire finally out . BBC News . 2019-02-08. 2019-03-26. en-GB.
  24. News: Sarah . Butler . Mattha . Busby . Ocado warehouse fire: Homes evacuated amid 'explosion risk' . BBC News . 6 February 2019 .
  25. News: Houses and industrial estate evacuated due to Ocado warehouse fire . The Guardian . 6 February 2019 .
  26. News: Ocado warehouse fire: Rebuilt Andover centre fully operational . 8 October 2022 . BBC News . 12 August 2021.
  27. Web site: 27 February 2019 . Bringing the best together: transforming UK grocery shopping M&S and Ocado announce new joint venture . dead . https://web.archive.org/web/20190405121246/http://corporate.marksandspencer.com/media/press-releases/5c2f8d617880b21084450f5e/bringing-the-best-together-transforming-uk-online-grocery-shopping-m-and-s-and-ocado-announce-new-joint-venture . 5 April 2019 . Marks and Spencer . en.
  28. News: Fish . Isabella . 2023-07-12 . M&S looks to refresh its ailing Ocado deal . en . The Times . limited . 2023-07-12 . 0140-0460.
  29. Web site: M&S update to customers Ocado. 2019-07-08. www.ocado.com.
  30. Web site: MonteBello . Leah . 8 February 2022 . M&S remains UK's fastest-growing supermarket catching up with Big Four grocers . 4 March 2022 . City AM.
  31. Web site: Bateman . Kayleigh . 21 July 2014 . Ocado Technology readies primary school teachers with code initiative . dead . https://web.archive.org/web/20140803070740/http://www.computerweekly.com/news/2240225117/Ocado-Technology-readies-primary-school-teachers-with-code-initiative . 3 August 2014 . Computer Weekly . Internet Archive.
  32. http://www.brandrepublic.com/opinion/939873/ Mark Kleinman on marketing and the City: Can Ocado deliver more?

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