Investment costs and accounting change increase losses at online firm Ocado

ONLINE GROCER Ocado has reported an increase in full-year losses after it was hit by investment costs and an accounting change.

The group reported a pre-tax loss of £44.4m in the year to December 2, up from £8.3m the previous year.

Ocado said it has begun to fulfil customer orders for Morrisons from its state-of-the-art facility at Erith and it is supporting Morrisons’ roll out of store-pick online shopping.

Ocado’s chief executive refused to be drawn on speculation it is close to signing a deal with Marks & Spencer. Ocado currently has a tie-up with Waitrose, but it has been suggested that M&S would step into the breach when the existing contract ends next year.

However, when pressed on the talks, chief executive Tim Steiner kept his cards close to his chest.

“We are in the business of talking to retailers, we’re constantly talking to retailers around the world. We are not going to deny or confirm,” he said.

“We have a good relationship with Waitrose and we enjoy selling their products to customers.”

Under the terms of the Waitrose deal, which expires in 2020, Ocado cannot sell own label products from rival retailers of a similar size.

If the M&S deal goes ahead, it will be the latest in a long line of tie-ups the firm has announced.

Ocado has signed deals with US retailer Kroger, Swedish supermarket group ICA, France’s Groupe Casino and also in Canada with Sobeys.

Retailers are keen to use its cutting-edge technology, which includes robots in warehouses.

On Brexit, Mr Steiner said that keeping vital supply routes open is essential to avoid food shortages.

He said Ocado is stockpiling mechanical spare parts for its warehouses, but warned that fresh food cannot be hoarded.