British retailer Marks & Spencer (M&S) confirmed on Tuesday that it is in talks with online supermarket Ocado about a joint venture in UK retail providing M&S with a full online food delivery service.
Both companies released statements following media speculation that M&S was in talks to pay 800 to 900 million pounds ($1.05-$1.19 billion) for a 50 per cent stake in the online business venture.
M&S is does not currently offer a full delivery service for its foods, but does sell wine, flowers and clothes online.
Reuters reported that M&S shares jumped as much as 4.3 per cent to a three month high on the news, while Ocado’s shares leapt as much as 12.5 per cent to a three week high.
In January M&S chief executive Steve Rowe said the company’s basket size was not appropriate for a full online grocery service.
A report by the Evening Standard said that if the partnership moves forward, Ocado would use M&S as a supply partner for its British customers as most of its products are supplied by Waitrose, in a deal which will end in September 2020.
