Ocado hails 'successful' switch to M&S despite cancelled orders

Ocado has trumpeted a “successful switchover” from Waitrose to Marks & Spencer as customers bought more M&S-branded groceries and booked slots for the weeks ahead.

The launch of the service at the start of this month was marred by complaints after a surge in demand led to some customers having their orders cancelled, the company said.

However, Ocado said shoppers had responded positively to the new lineup, with demand for the new M&S range “driving both an increase in the number of products in customer baskets and strong forward demand”.

The Ocado Retail chief executive, Melanie Smith, hailed the switchover, adding: “As a result, we can now offer customers more choice and better value than ever before, wider ranges than any traditional retailer, and thousands of products that are only available online through Ocado.com.”

The M&S launch has been closely watched by the retail industry after Ocado and Waitrose ended a 20-year partnership.

Waitrose has launched a marketing push to persuade customers to move to its website, rather than remaining with Ocado and switching to M&S products.

The initial range of 4,400 M&S food products replaced about 4,000 from Waitrose, with online grocer billing them as “high quality alternatives at the same or better prices”. Ocado said there were more M&S products going into the average basket than was the case with Waitrose. This trend reflected the “positive customer reaction to the addition of M&S to the range”, Smith said.

The pandemic has led to boom in online shopping, and all the big supermarkets have expanded their delivery services to meet demand. Ocado is aiming to increase its own delivery capacity by 40% in the coming year. Sales at Ocado Retail, Ocado’s joint venture with M&S, were up 52% in the 13 weeks to 30 August.

The Ocado deal is also an important move for M&S, whose grocery delivery services were previously limited to party food. M&S last month announced it was cutting 7,000 jobs in management and stores as it tried to reduce costs.

The Shore Capital analyst Clive Black said the 52% sales rise was “considerably ahead of the wildest optimism that may have been around at the time of the creation of the joint venture [with M&S]”.