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Fred Searle

BY FRED SEARLE

M&S and Ocado complete tie-up

M&S fights back after two years of falling sales, completing a £750 million JV with delivery specialist Ocado

M&S and Ocado complete tie-up

Ocado's Tim Steiner (left) and Steve Rowe of M&S

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Marks and Spencer has completed its tie-up with Ocado, embarking on a journey that will make it a digital-first retailer and give customers access to its full range.

The 50/50 joint venture comprises Ocado’s UK grocery business, supported by its Smart Platform technology.  

To date, access to the full M&S range has been limited to around a dozen stores but from September 2020 over three-quarters of the UK population will be able to buy more than 6,500 M&S food products via Ocado.com. 

Alongside these items, shoppers will have access to Ocado’s exclusive brands and own-label products, as well as popular branded goods.  

The JV will also see certain members of staff switching roles. Ocado Retail has appointed M&S strategy director Melanie Smith as its chief executive, while Lawrence Hene, currently the interim managing director of Ocado Retail, has been named deputy chief executive for a transitional period before moving back to a senior role within the Ocado group.

M&S chief executive Steve Rowe and food managing director Stuart Machin will become directors of Ocado Retail. 

Rowe said: “I have always believed that M&S Food could and should be online. The addition of Ocado to our family of businesses marks M&S’s first truly transformational step in shaping our future as a digital-first retailer. 

“Through its unique technology, Ocado has developed the most cost-advantaged model in online grocery retail and our new partnership unlocks growth for M&S Food through an immediately profitable, scalable presence in the UK’s fastest growing grocery sales channel.

He added: “I am absolutely delighted that our JV will be led by Melanie. She is a real talent; who combines extensive retail knowledge, strategic vision and a focus on delivery.”  

Ocado Retail will continue to trade as Ocado.com and M&S products will be available on the platform from September 2020 at the latest.  

M&S said it expects Ocado Retail to generate around £70m of synergies for M&S Food by the third year of the joint venture, through a combination of increased buying scale, improved sourcing economies to M&S own label and branded goods, and a significant reduction in product trial and development costs. 

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