Ocado

Ocado Group plc
Public limited company
Traded as LSE: OCDO
Industry Internet retail
Founded 2000[1]
Founder Jonathan Faiman, Jason Gissing and Tim Steiner
Headquarters Hatfield, Hertfordshire, United Kingdom
Area served
 South East England, Midlands, North West England, the South Coast of England and most of Yorkshire, South West England and South Wales
Key people
 Stuart Rose, Chairman
Tim Steiner, CEO
Services Groceries, consumer goods
Revenue £1,107.6 million (2015)[2]
£21.4 million (2015)[2]
£11.8 million (2015)[2]
Website www.ocado.com

Ocado is a British online supermarket.[3] In contrast to its main competitors, the company has no chain of stores and does all home deliveries from its warehouses. Ocado has been voted the best online supermarket in the UK by Which? readers every year since 2010.[1][4] The company was floated on the London Stock Exchange on 21 July 2010 and is currently a member of the FTSE 250 Index.

History

An Ocado delivery in progress

Ocado was founded in April 2000 by Jonathan Faiman, Jason Gissing and Tim Steiner, former merchant bankers with Goldman Sachs. Ocado was launched in January 2000 as a concept and started trading as a business in partnership with Waitrose in January 2002. When the company first started, Faiman, Gissing and Steiner ran every part of the business themselves.[5]

In September 2006, Michael Grade became non-executive chairman of Ocado, shortly after Goldman Sachs were appointed as financial advisers, fuelling speculation which had already started about a listing for the company.[6]

In November 2008, the John Lewis Partnership transferred its shareholding of 29% into its staff pension fund. It also agreed a five-year supply deal with the business, replacing its previous one-year rolling deal.[7] This deal was replaced in May 2010 with a 10-year branding and supply agreement.[8] Procter & Gamble took a 1% stake in the company the same year.[9] In February 2011, the John Lewis pension fund sold off its entire Ocado shareholding.[10]

On 13 July 2009 Ocado released their first app for the iPhone. The app, called 'Ocado on the Go', allows users to do their grocery shopping without the need of a PC.[11] On 19 April 2010 the company extended the app to Android devices. The Android app has a number of features that the iPhone app does not have, including the ability to control the app using only the voice.[12] In 2015, Ocado launched the first grocery app for the Apple Watch.[13]

In July 2010 Ocado, following considerable speculation, undertook a stock market Initial public offering.[14]

Operations

Ocado's warehouse in Hatfield

The company has a warehouse-based model, operating purely online without any physical shops. It currently has twenty-two purpose-built warehouses/picking centres.[15]

Ocado's products include own brand groceries from the Waitrose supermarket chain as well as their own Ocado brand, but also a selection of name brand groceries and other items, including flowers, toys and magazines.[16] A range of Carrefour's products are also sold via Ocado.[17]

Morrisons Online Deliveries

Since January 2014, Ocado have been delivering online groceries for one of their main grocery rivals Morrisons supermarkets, using Ocado's nationwide network of depots to deliver Morrisons groceries to online customers. The fulfilment of Morrisons.com grocery website customer orders comes from Ocado’s Dordon Customer Fulfilment Centre (CFC) in the Midlands, with deliveries brought to the customer's doorstep via Morrisons liveried fleet. Morrisons made an initial capital payment of up to £170m to Ocado to acquire Dordon and associated mechanical handling equipment, as well as a licence and integration fee. A further £46m was invested to expand Dordon in order to accommodate Morrisons range, integrate with Morrisons systems and establish a network of delivery spokes. On an annual basis, Morrisons pay service costs and a contribution to R&D expenditure.

Dalton Philips, Chief Executive of Morrisons said: “This agreement is a significant strategic step for Morrisons. From a standing start, Morrisons will be competing in the fast growing on-line channel by the end of this year with a really compelling proposition. The customer gets our affordable fresh food delivered by Ocado’s state of the art distribution system. I’m confident that Morrisons.com will grow over time to be an operation of real scale and significance whilst creating meaningful long-term value for Morrisons shareholders." [18]


Name

Jez Frampton, CEO of Interbrand and non-executive director of Ocado, claims the name "Ocado" is "a made-up word, intended to evoke fresh fruit". The name was also inspired by avocado.[19]

See also

References

  1. 1 2 "Ocado History". Ocado. 2011. Retrieved 2 February 2014.
  2. 1 2 3 "Annual Report 2015" (PDF). Ocado. Retrieved 10 April 2016.
  3. ↑ Pratley, Nils (17 May 2013). "Divorce from Waitrose now the only risk for Ocado". The Guardian. UK. Retrieved 9 January 2013.
  4. ↑ "Supermarkets compared - Best and worst supermarkets - Leisure - Which? Home & garden". which.co.uk. Retrieved 31 March 2015.
  5. ↑ "Ocado Factsheet". Just-food, Aroq Ltd. 2008. Retrieved 28 October 2008.
  6. ↑ "Ocado prepares for 2006 flotation". The Guardian. 24 December 2004. Retrieved 10 April 2016.
  7. ↑ "Ocado gets five-year John Lewis backing". Daily Mail. London. 8 November 2008.
  8. ↑ "Waitrose and Ocado Announce New 10 Year Branding and Sourcing Deal". John Lewis Partnership.
  9. ↑ "Ocado delivers a £140million windfall". Daily Mail. London. 17 June 2009. Retrieved 21 July 2010.
  10. ↑ Wood, Zoe; Kollewe, Julia (12 February 2011). "Ocado share sell-off delivers £152m to John Lewis pension fund". The Guardian. London. p. 45.
  11. ↑ "devoted to your shopping". Ocado. Retrieved 21 July 2010.
  12. ↑ "Ocado Android app allows mobile grocery shopping using voice". Internet Retailing. 19 April 2010. Retrieved 21 July 2010.
  13. ↑ Sabharwal, Veebs. "Ocado Technology launches world's first grocery shopping app for Apple Watch". Retail Gazette. Retrieved 16 August 2016.
  14. ↑ "Ocado's IPO Buyers Include Fidelity, Other Early Investors". Wall Street Journal. 29 July 2010. Retrieved 10 April 2016.
  15. ↑ "Where we are". Retrieved 18 February 2016.
  16. ↑ Davey, James (7 November 2008). "Update 2-John Lewis moves Ocado stake to pension fund". Reuters. Retrieved 21 July 2010.
  17. ↑ "The French connection: Ocado strikes deal to deliver groceries from across the Channel to UK customers". Daily Mail. 27 June 2011. Retrieved 7 July 2011.
  18. ↑ "Morrisons Announce Deal With Ocado". FMC News.
  19. ↑ Mark Kleinman on marketing and the City: Can Ocado deliver more? Brand Republic, 22 September 2009
Wikimedia Commons has media related to Ocado.
This article is issued from Wikipedia - version of the 12/1/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.