Ocado launches trial of one-hour delivery service

Ocado one hour delivery
// Ocado to trial one hour delivery service called Ocado Zoom.
// Trial will begin in West London next month
// Zoom will let customers make small-batch, one-demand pick ups.

Ocado has unveiled plans to launch a one-hour delivery service next month amid growing speculation it could pen a new food delivery deal with M&S.

Announced during an investor presentation amid Ocado’s full-year trading update this morning, the retailer’s new Ocado Zoom service is set to be trialled in West London from next month.

It will offer customers on-demand “small batch delivery” and will target the sub £60 section of the market.

Ordinary Ocado deliveries often relied on larger basket sizes for deliveries.

Ocado chief executive Tim Steiner insisted that the new service was in response to customer demand, not because of the threat of Amazon’s Prime Now service.

“[Amazon is] not a big factor today in the UK grocery market – the competition market is really between ourselves and the big bricks and mortar retail operations,” he said.

“Amazon haven’t made a big impact in the UK grocery space.”

Steiner added that Zoom’s range of items would be full, instead of just a few thousand normally available in a local supermarket shop.

He also would not confirm nor deny during the investor’s presentation if Ocado was indeed in talks with M&S over a potential deal.

Ocado is currently in a food delivery deal with Waitrose, but news emerged last week that M&S might step in when the existing contract ends next year.

The online grocer also has a deal with Morrisons, as well as deals as a technology provider for major grocers around the world such as Kroger, Sobeys and Casino.

Earlier this morning, Ocado reported a pre-tax loss of £44.4 million in the year to December 2, compared to a loss of £8.3 million the previous year.

However, sales rose 12.3 per cent to £1.59 billion.

Meanwhile, earnings fell 20.7 per cent to £59.5 million as it counted the cost of investing in partnership deals with overseas grocers and developing new warehouses and IT systems.

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