And it's not even April Fool's day. Yes, Ocado, a company I love and use because I know they can't make any money out of me and yet provide a good service, are going to sell spare capacity to Morrisons, a shopping experience that you just won't run back to who think people need their amazing product at des res in the Home Counties. Hmm...
In the middle, Waitrose. A store whose brand is such that house prices rise when one opens in the neighbourhood. How Waitrose react will be critical. Ocado seem to have come up with a good plan whereby they have in effect sold their distribution centre that they had no ability to use.
This probably screws Waitrose who have a no compete clause, but by selling the business Ocado will think they have managed around this. The devil will be in whether Waitrose can find a way to get at Ocadao through their delivery management agreement with Morrisons.
Clearly the market thinks Ocado have pulled it off as the share price is up 30% this morning. Indeed, it is a company saver as they had invested in a white elephant that they have managed to sell. However, long term their relationship with Waitrose will end and they still never make any money and lose on every delivery. it's a real dotcom business model, sometimes like Amazon they work in the end of course...
Great comment re Waitrose. The denizens of riverside Deptford are cock-a-hoop about the upcoming opening of a Waitrose in the new development there. I suppose it's good schools for single people.
ReplyDeleteI haven't tried Ocado, maybe I should. Sainsbury's online offering is my standard, although they are not so good at short notice deliveries. I might actually *walk* to Tesco tomorrow...!
By the way, what is the massive exclamation mark sign that appears at the top of the screen all about?
ReplyDeletewhere is that BE - cant' see it on my IE8 browser?
ReplyDeleteDumb-ass move by Ocado given that Waitrose have a break clause in their contract for 2017 which will now likely be triggered by flirting with with Morrisons - It's akin to losing a classy good looking wife because you flirted with a cheap northern tart.
ReplyDeleteFirefox user and I can see an great big exclaimation mark inside a warning triangle at the top of this post Mr City-Slicker
ReplyDeleteYup - only Adblock Plus in Firefox has got rid of it.
ReplyDeleteSame thing . Exclamation mark and triangle. Some google ads nonsense I suppose.
ReplyDeleteStill, its got rid of those ads for "40 something MILFs in your area need attention!"
{btw - if no one else gets those adverts for mature dating then neither do I.}
And- Et In Ocadio Ego.
ReplyDeleteThat was my first thought too. But Morrisons may make up the loss from Waitrose. It might actually be a very good move.
CU,ND and myself have all independently pointed out the flaws with the Ocado model before. In fact it was one of the few where we issued a "Don't go there Sister" Hand in the face advice to potential investors.
But as CU says, this could be a game changer. Morrisons customer base is huge and ready for some offers to get them buying online.
And- Et In Ocadio Ego.
ReplyDeleteThat was my first thought too. But Morrisons may make up the loss from Waitrose. It might actually be a very good move.
CU,ND and myself have all independently pointed out the flaws with the Ocado model before. In fact it was one of the few where we issued a "Don't go there Sister" Hand in the face advice to potential investors.
But as CU says, this could be a game changer. Morrisons customer base is huge and ready for some offers to get them buying online.
I understand the point that Morrisons is possibily bigger better host to leech off of - I wonder if it will be as profitablilty (?)
ReplyDeleteCan Ocado grab enough ££ with Morrisons within the next 3 years before the break - alternatively could a divorce come sooner as Waitrose will not want their brand diluted with Morrisons associations.
really this is a new produvt that can be so helpful. in this way we can be certing to mek sure this ideas...""""In the middle, Waitrose. A store whose brand is such that house prices rise when one opens in the neighbourhood. How Waitrose react will be critical. Ocado seem to have come up with a good plan whereby they have in effect sold their distribution centre that they had no ability to use.""""
ReplyDeletethis is very amazing to be read i enjoy it real "" Clearly the market thinks Ocado have pulled it off as the share price is up 30% this morning. Indeed, it is a company saver as they had invested in a white elephant that they have managed to sell. However, long term their relationship with Waitrose will end and they still never make any money and lose on every delivery. it's a real dotcom business model, sometimes like Amazon they work in the end of course... ""
ReplyDelete