Since then the online grocer Ocado recently signed a 10-year agreement with the supermarket Waitrose, boosting its chances of a £1bn flotation. Ocado's existing contract with Waitrose was due to expire in 2013, but the agreement extended the supply relationship until 2020. The new agreement will also enable Waitrose to grow its own home shopping service without restriction from July 2011 within the M25.
But £1 billion! For a company that delivers for other supermarkets and hasn't made a profit in a decade.. Seems an awful lot.
A £1 billion valuation would see the company trade at 40 times ebitda, compared with Tesco and Sainsburys, which trade on seven and eight times respectively. The founders think this is more like the next Ebay or Amazon, with huge , huge profits to come. And Ocado sent an email to customers informing them they can buy shares IF they have spent at least £300 by July 24th. I do hope customers realise that Ocado delivers for Waitrose. It isn't Waitrose. The John Lewis pension groups investments are expected to be sold at flotation.
So is this the new M&S. The middle classes retail shares of choice? The deal of the decade?
Ocado has made great strides this year but I'm not sure in the budget conscious times about to arrive that this will continue. Remember Nick Clegg in summer 2008, as the recession started to bite, said that his family were "gravitating away from Ocado towards Sainsbury's, just on price. I have to say, the difference is pretty big".
I see Mrs Q has spent only about £100 on Ocado this year. She now goes direct to the store when she is in the town. Combining trips to the supermarket with something else.
Can't say I'm overly tempted to ask her to ramp up another £200 to get those shares.