Marks & Spencer Looks To Launch Food Delivery Service With Ocado

Marks & Spencer is in discussions with online supermarket Ocado that would offer the British retailer a food delivery service for the first time.

“Following press speculation, Marks and Spencer Group PLC confirms that it is in discussions with Ocado Group plc regarding a joint venture in U.K. retail. There is no certainty that these discussions will result in any agreement or as to the timing of any such agreement,” according to a statement on the M&S corporate site.

London’s Evening Standard was the first to report that M&S will pay Ocado between £800 million and £900 million for a 50 percent stake in the venture. The news sent shares in both companies soaring, with Ocado up 10 percent and M&S seeing a 4 percent boost.

Ocado launched online grocery deliveries 20 years ago with Waitrose, but their latest agreement is set to end next year. Sources say that M&S and Ocado are trying to reach a deal before March 1, the deadline for Ocado to activate an 18-month break clause with Waitrose.

Last year, Ocado inked a deal with Kroger to be its exclusive partner in the U.S., giving it an entry in the U.S. market. In addition, the two launched a high-tech customer fulfillment center (CFC) in Ohio in November, and just last week announced that Central Florida and the Mid-Atlantic will be the next regions for two new CFCs. Kroger has committed to building 20 CFCs throughout the United States.

“This announcement marks another important step toward combining Kroger’s long-standing dedication to innovative and world-class grocery services with Ocado’s unique, industry-leading technology,” Luke Jensen, CEO of Ocado Solutions, said at the time. “As the U.S. retail landscape continues to change, these CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience in these two major markets.”