UK online grocer Ocado reportedly may avoid new partnerships for as long as two years as it focuses on its pact with supermarket chain Morrisons; Ocado's shares advanced more than 400% last year as investors saw prospects for more partnerships

Cindy Allen

Cindy Allen

April 11, 2014 () – Ocado Group Plc, whose shares have surged since it partnered with Wm Morrison Supermarkets Plc to help the U.K. food retailer sell online, may shy away from similar deals for as long as two years to focus on improving its service, a person familiar with the matter said.

Internet-only grocer Ocado first wants to reconfigure some of its software infrastructure and develop cheaper and smaller warehouses for potential customers, said the person, who asked not to be identified because the plans are not public. Ocado also wants to ensure the Morrison venture is successful before starting others, the person said.

Ocado advanced more than 400 percent last year as investors saw prospects for more partnerships like its 25-year accord with Morrison, which potentially puts a higher value on Ocado’s Web and logistics technology than its own retail business. Under the deal, Ocado helped Morrison make a belated entry into selling online groceries in January of this year.

Ocado Chief Financial Officer Duncan Tatton-Brown said as recently as March 12 that investors should not bank on the announcement of a new deal in the next 12 or 24 weeks.

A spokesperson for Ocado declined to comment.


To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Robert Valpuesta

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