M&S chairman says Ocado still “can’t serve a lot” of customers a year after tie-up

Ocado is still plagued by capacity issues and “can’t serve a lot of Marks & Spencer customers” according to its chairman Archie Norman.

The online grocer is still struggling to match demand from customers almost a year after it launched its joint venture with M&S, Ocado Retail, marking the first time ever its food has been available to buy online.

According to The Telegraph, M&S’ own chairman Norman admitted that Ocado “doesn’t cover a lot of the country” and needed lots of investment to expand its operations and match demand.

Speaking to investors at M&S’ annual general meeting, Norman said: “Working in a joint venture, you have to put a bit more work into it to make sure you’re aligned.

“We have to position our business right for (online), and make sure that Ocado has the right growth in place.”

On the first day Ocado Retail launched in September last year, seeing the online grocer replace hundreds of Waitrose goods with M&S items, it was forced to cancel orders just hours before they were due to be delivered.

While it apologised to customers and said it was due to an unexpected “surge in demand”, it represented the latest in a string of capacity issues that have dogged Ocado since the start of the pandemic.

READ MORE: Ocado stops all deliveries to staff after it “underestimated the demand for M&S food orders”

In July 2020, Norman warned customers that the lockdown spike in demand meant Ocado was continuing to operate “at capacity” and therefore was not able to serve many new customers when the joint venture launched.

To tackle this issue Ocado has now pledged to increase capacity by 40 per cent by the end of 2021 through “significant” investment next year.

Ocado’s model relies on highly automated warehouses which pick online orders automatically.

While its technology has until now been its unique selling point, the expensive and complex sites are now preventing Ocado from being able to meet its customers’ needs, seeing many of them turn to the increasing number of rapid delivery alternatives.

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