Morrisons/Ocado - comment

Morrisons pivoting towards online order fulfilment via store picking is a negative for Ocado but partly reflects Morrison’s need to utilise its largely owned stores. We see the use of stores vs a warehouse as increasing the risk of being unable to fulfil customer orders. The Morrisons contract generates around £30m of EBITDA for Ocado, and whilst they will lose some of the warehouse capacity fees, they will still be providing the IT logistics services. When Morrisons ceases using capacity in Erith, Ocado will be able to use it exclusively for M&S. The absence of a second “tenant” may make separating the JV in a future sale to M&S.

https://www.retailgazette.co.uk/blog/2024/11/morrisons-ocado-tech/