Grocery delivery specialist Ocado has countered speculation surrounding its one-year old home-shopping deal with Morrisons, meant to last 25 years, with reassurance regarding the arrival of David Potts at the beleaguered Bradford-based multiple.
Duncan Tatton-Brown, Ocado chief financial officer, said in a conference call following the company’s update for the first quarter to 22 February, that a meeting was already planned with Potts.
Morrisons chairman Andrew Higginson had been clear about the fact that Potts would have urgent things to on which to focus when he arrived at Morrisons.
“I don’t think he needs to worry so much about his e-commerce business because I think that’s doing quite well,” Tatton-Brown said.
He had seen reported that Higginson had said that the deal the Ocado signed with Morrisons’ ousted chief executive, Dalton Philips, was the best deal done under Philips’ watch. “We do believe Morrisons did a good deal with us. We know that we are providing a good service to them. We expect to continue to provide a good service for them. So we look forward to the future with confidence,” Tatton-Brown said.
“As part of the original negotiations you want to ensure that a partnership like this which lasts for 25 years, the relationship works well. Contractually both sides are obliged to meet.
“Morrisons has been very pleased with the operations and the scale of business they’ve built up. I believe they are the fastest growing online grocery business ever because they have gone from a standing start to a £200m run rate, according to their public statements, in a year and their service has the highest service standards…”
The service was continuing to grow and Tatton-Brown thought Morrisons was “pretty happy” with it.
“The reality is we’re pleased with our performance in this area, we believe they are pleased with the service we are providing and we expect it to continue.”
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