Ocado is facing mounting pressure from investors as doubts grow over whether its grocery technology business can deliver the scale of returns once promised.
The online grocer turned automation specialist has spent years trying to reposition itself as a global technology provider, selling its warehouse robotics and software to international supermarket partners.
However, The Times reported that investor patience is wearing thin after a series of setbacks, including weaker online grocery demand, slowing international momentum and pressure on Ocado’s share price.
The company was valued at close to £22bn during the pandemic, when demand for online grocery surged and Ocado’s technology business attracted significant investor excitement.
However, its market value has since fallen to around £1.5bn, while its shares recently dropped below the 180p price at which the company floated in 2010.
The pressure comes amid reports that Ocado is searching for a successor to co-founder and chief executive Tim Steiner, who has led the business for more than 25 years.
The company is understood to have sounded out potential candidates, including Niklas Heuveldop, chief executive of Vonage, which is owned by Ericsson.
Ocado has said its chief executive and board “continually engage in long-term succession planning and regularly engage with potential candidates”.
The group has suffered several blows to its international technology ambitions, with US partner Kroger and Canadian partner Sobeys both closing warehouses using Ocado technology.
It is also locked in a dispute with Marks & Spencer over the final payment linked to M&S’s £750m acquisition of a 50 per cent stake in Ocado Retail in 2019.
Despite the challenges, Ocado secured a new UK partnership with Asda earlier this month, with the supermarket set to use Ocado’s technology to support its online grocery operations from 2027.
Ocado is also pushing ahead with cost savings, including plans to cut 1,000 jobs, as it looks to improve profitability and reassure shareholders.
The business reported a 12 per cent rise in sales to just under £1.4bn last year, but its pre-tax loss widened to £378m.
Steiner, who co-founded Ocado in 2000, has long argued that the business is more than an online grocer, with its future tied to automated fulfilment technology.
However, investors are increasingly questioning whether the company can turn years of heavy investment into sustainable profits.
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