Ocado boss Tim Steiner has downplayed the impact of Amazon’s Whole Foods acquisition − and insisted it will help the etailer to sell its technology.
The online grocer is pursuing a strategy to license its Ocado Smart Platform to overseas retailers looking to build an online proposition.
Ocado has already penned one deal with a regional European retailer and Steiner said much of the interest in its technology had come from the Continent.
However, he believes Amazon’s proposed $13.7bn (£10.7bn) acquisition of Whole Foods is “accelerating” the discussions Ocado is having with US grocers because it has made them “more alert to channel shift”.
Amazon Fresh
Speaking about Amazon’s move after Ocado posted a slip in interim pre-tax profits, Steiner said: “I don’t think it’s going to have an immediate impact on the retail part of our business in the UK. Whole Foods has a relatively small business here.
“It is stirring things up in the US in terms of existing bricks-and-mortar grocers as they look forward and imagine what competition they will be facing in the coming years”
Tim Steiner
“Obviously it could give access to Amazon Fresh to have a bigger range, but we’ve seen very little impact from Amazon Fresh here in the UK.
“It is, however, stirring things up in the US in terms of existing bricks-and-mortar grocers as they look forward and imagine what competition they will be facing in the coming years.
“We’ve seen increased interest in our solution from players in the US, so overall it’s a positive move for our solutions business.”
European market
Steiner added: “There has been more interest generally, historically, out of Europe than there has been out of the US in the whole online market.
“People’s perception of the size of the market or the opportunity has been stronger in Europe. I think that perception is starting to change.
“The Amazon deal is just stirring up the US quite substantially in terms of people’s concerns about channel shift.”
Steiner reiterated his desire to sign multiple deals with overseas retailers “in the medium term” and described Amazon’s Whole Foods acquisition as “a positive catalyst in that direction”.
Channel shift
He suggested that the etail titan’s move was not designed for it to own a bricks-and-mortar chain that it can improve, but was in fact “a stepping stone to driving channel shift to online in the grocery sector”.
However, Steiner dismissed the notion that Ocado could open bricks-and-mortar stores to achieve a similar goal.
“I don’t believe that we need to buy a bricks-and-mortar retailer,” he said.
“We have a large, growing, outperforming UK retail business and internationally we are talking to bricks-and-mortar retailers about working together to help them grow their online grocery businesses.”
No comments yet