Business Irish

Wednesday 17 January 2018

Online grocer Ocado's CEO upbeat after Amazon's move

Ocado Group ceo Tim Steiner
Ocado Group ceo Tim Steiner

Ocado Group's CEO Tim Steiner has said the UK online grocer's chances of licensing its technology to a US counterpart have been boosted by Amazon.com's acquisition of Whole Foods Market.

The $13.7bn (€12.1bn) deal "is a positive move for our solutions business and we've seen increased interest from players in the US", said Mr Steiner. He has been talking up the potential for international partnerships for several years, but so far has only signed up an as-yet unidentified regional European retailer. Ocado is in talks with a number of US grocers, he revealed.

Amazon's agreement to buy Whole Foods has caused sceptical US supermarkets to rethink the potential size of the online market, according to Mr Steiner. Only about 1pc to 2pc of the US food retail industry has moved online, although this is forecast to rise to 6pc over the next five years.

Ocado reported a 9.4pc drop in first-half pre-tax profit, linked to the opening of a new distribution centre.

Shares rose 1.2pc to 293.1 pence at 9.04am in London, after initially gaining 5.5pc. Ocado's so-called smart platform encompasses everything from robots that pick groceries to software that routes delivery vans. The company generates minimal profit from its own retail business, so licensing deals are seen as crucial to growth. (Bloomberg)

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