Ocado confident it can tie up deal with Morrisons despite Amazon agreement

Ocado said last month that it was in talks with Morrisons to renegotiate a deal struck in 2013.

The amendments sought by Morrisons were disclosed on the same day it announced a major tie-up to supply Amazon with groceries, raising questions about the future of its relationship with Ocado.

Morrisons is using Ocado to distribute its online products. Morrisons’ separate deal with Amazon is a wholesale agreement where Morrisons will supply its products and Amazon will decide how much it charges for them.

Ocado said on Tuesday that the new Morrisons agreement is on course to be finalised, reassuring investors over a tie-up which Shore Capital analysts have called “critical to Ocado’s future”.

Ocado’s CFO Duncan Tatton-Brown said the deal will be finalised “relatively soon”.

“Don’t think it’s going to be the end of the year before we announce something,” he said. “Lawyers need to put that into contracts and that takes some time but everything’s progressing as we would expect.

“It is about coming to an agreement with Morrisons with both parties agreeing to it. You can assume Morrisons are happy with anything they sign and we’re happy with anything we sign.”

Morrisons said in February there was no certainty an agreement would be concluded.

Ocado, which also sells products supplied by upmarket chain Waitrose, posted a 14 per cent rise in gross retail sales in the 12 weeks to February 21.