Ocado finance chief Tatton-Brown insists Morrisons' tie-up with Amazon is 'good news'

Ocado, which already has a partnership in place with Morrisons to provide the technology and logistics platform for its transactional website, dismissed suggestions that its partner’s deal with Amazon could hinder its own long-term performance.

Last month, Morrisons unveiled details of the agreement to supply hundreds of frozen, fresh and ambient goods to Amazon just days before it posted a 27% fall in full-year profits, alongside its first quarterly sales increase since 2012.

Tatton-Brown, who was speaking after Ocado revealed a 13.8% jump in first-quarter retail sales, said: “Amazon’s growth in the online channel, we think, is good for online grocery. It will grow the size of that market.

“As long as we maintain or grow our market share in that channel, this is good news for us.

“We are confident that we can continue to grow in line or ahead of the online grocery market. In fact, we have stated that we expect to grow ahead of the online grocery market.

“So no, we are not concerned about Morrisons’ tie-up with Amazon. It’s all about channel shift, which we think is good news.”

International deals

Ocado wants to agree “multiple” overseas deals to offer retailers the same technology and logistics services it provides for Morrisons in the UK, but gave no update on the search for an international partner.

Boss Tim Steiner had initially targeted the end of its last financial year, in February, to announce a deal.

But Tatton-Brown claimed it was “not a race” to do the online grocer’s maiden overseas deal and insisted that the Ocado Smart Platform remained an attractive proposition to potential partners.

“We have no change in the level of confidence about the attractiveness of our proposition or our prospects for working with partners around the world,” Tatton-Brown added.

“The further we go on, the more evidence we have that the proposition we’ve got is the right proposition and the capabilities we’ve got are the right capabilities.

“I think that is evidenced by Morrisons and our own announcement that we are sharing capacity in our fourth facility.

“Morrisons know about the new technology, they know about the new capabilities and believe it’s sensible for them – subject to agreeing the final contractual terms – for us to work together for them to grow their business in the UK.

“So as the months progress we have more confidence, not less confidence, and I think Morrisons is an example of that.”