The papers are chocked full of coverage of what The Daily Mail has dubbed “the deal that turned Ocado into a global tech titan”. Ocado is on the cusp of promotion to the FTSE 100 after it reached a potentially game-changing partnership with one of the world’s biggest grocers, writes The Times (£). Online grocer Ocado has defied doubts dating back to the dotcom boom with a landmark deal to break into the world’s largest grocery market (The Telegraph).
“Ocado shares jump 45% on landmark US deal” is the headline in The Financial Times (£). “US deal boosts Ocado’s stock market value to £5.3bn”is The Guardian’s headline. Ocado’s rocketing share price is also the focus of articles on The BBC, Sky News, The Daily Mail and The Independent.
Ocado’s Kroger deal wins over sceptics and cheers investors, writes The Financial Times (£), noting that the market expected a US partnership but nothing on scale of tie-up announced with the US grocer. “Even Ocado pessimists conceded it was a game-changer,” the paper writes. Similarly, “From zero to hero: Ocado delivers the goods” says The Times (£), noting its many critics were left eating their words after company struck a transformative tech deal.
In The Times (£) Alistair Osborne eats some humble pie, writing that Tim Steiner’s appearance in his columns “were invariably accompanied by a headline of unflinching encouragement: “Delivery van may still hit a pothole”, “Ocado still failing to deliver the goods”, “Van man stuck on a road to nowhere”.” Although he does note: “Still, true to form, one thing’s still missing from Mr Steiner’s American Dream: the financial terms.”
Alex Brummer in The Daily Mail also cautions: “Before anyone gets overexcited it is worth remembering that breaking into the American market can be difficult. One cannot imagine the Teamsters union, for instance, being entirely happy about warehousing which replaces toilers with computers and systems analysts. There must also be questions as to whether Ocado has the management capacity to deliver the systems, and what the response will be from ruthless rivals Amazon and Walmart.”
Could Ocado’s landmark US deal finally spark an Amazon swoop, asks The Telegraph? “Ever since Tim Steiner decided to turn his back on the banking industry to found Ocado in 2000 there has been speculation as to when Amazon will mount a blockbuster takeover bid.” (The Telegraph)
Hedge funds have been caught short by Ocado and its US tie-up, notes The Finanical Times (£) writing the online group’s Kroger deal is ‘a poke in the eye’ for those who bet against it. “Getting it so wrong this late in the game seems hard to comprehend. While Ocado sceptics were caught out by the Kroger deal, many more had seen it coming — and for one obvious reason: the threat to food retailers from Amazon.”
Business secretary Greg Clark has written to the UK competition regulator to insist that its inquiry into J Sainsbury’s proposed takeover of Asda look at the implications for supermarket suppliers (The Financial Times £). Ministers have called on the competition watchdog to investigate whether the £12 billion merger between Sainsbury’s and Asda is likely to harm supermarket suppliers and the food industry (The Times £).
Walmart helped to ease doubts about its e-commerce challenge to Amazon as it reported accelerating online sales in its first quarter, with online sales in the US rising 33% in the three months to the end of April (The Financial Times £). A sharp rise in online sales at Walmart cheered investors yesterday as the world’s largest bricks-and-mortar retailer showed that it was making up lost ground on Amazon (The Times £).
Supermarket giant Asda has rung up its fourth consecutive quarter of sales growth, shrugging off the tough retail climate as it gears up for a proposed £15bn merger with Sainsbury’s (The Telegraph). Walmart-owned supermarket Asda saw its profits take a hit in the last quarter as it continues to ramp up its efforts to cut prices for consumers in a bid to fend off competition (The Daily Mail).
Marks & Spencer went on “to buy” lists after it offloaded a slice of its pension liabilities. Shares in the retailer gained more than 3 per cent, up 9p to 297.3p after it transferred almost £1.4 billion of liabilities to Aviva and Phoenix in a move that reduces the financial burden on its scheme. (The Times £)
A major producer of plastic bottles in the UK is to increase its recycled content to more than 50% within four months. Princes, which produces 7% of plastic bottles used in the UK, says it has started the process to increase the amount of recycled plastic in all its bottles and will finish by September. (The Guardian)