Ocado Group has reportedly dropped its battle for a £190m final payment from Marks & Spencer linked to the pair’s joint venture.
The 2019 JV formed Ocado Retail and enabled M&S Food to sell online for the first time, in £750m deal.
But Ocado Retail did not meet undisclosed performance targets in its 2023 financial year, on which M&S’s final payment of £190.7m was contingent under the terms of the deal. Ocado Group estimated at the time that it would receive £28m, though it was seeking more “either via a formal litigation process or settlement”.
Sources have now said that no final payment will be made, The Times has reported, quoting a person close to the situation saying: “It’s a dead duck.”
The newspaper has also reported that M&S has refused to commit to new warehouses or increase volumes at existing sites until the Ocado Group agrees to improved commercial terms, in a fresh conflict. M&S is said to be seeking greater operational efficiencies, improvements to systems, more favourable commercial terms over Ocado charges for capacity, and changes to technical agreements.
An M&S spokesperson said: “We have a good relationship with Ocado. As you would expect, we are in regular discussion, working together to realise the full potential of our partnership. These discussions are positive.”
An Ocado spokesperson said: “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.
“We expect to build further on this momentum in the coming months by expanding order capacity for customers while maintaining strong growth. Together with our joint venture partners at M&S, we remain focused on realising the significant potential of the Ocado Retail business.”
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