M&S chairman Archie Norman told shareholders that he was “not happy” with Ocado Retail performance last week and said there was “work to do” with the joint venture it runs with the online grocer.
Ocado Retail posted a £501m loss earlier this year, up from £177m the year before.
According to The Times, the online grocer is set to receive 40% less than it had hoped in performance payments from M&S because of the decline.
The high-street stalwart had been due to pay the etailer £191m in 2023, the final instalment of the £750m Ocado Retail joint venture deal agreed in 2019, but that figure is expected now to be about £70m less.
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Despite this, Norman backed the partnership and said M&S “strongly believes in the future of Ocado”.
“We think it’s the right model for M&S online,” the retail sector veteran said.
An Ocado Retail “reset” is now under way, which the Marks & Spencer board outlined at its AGM. Part of the turnaround includes improving the customer experience, introducing cost-cutting measures and improving product availability.
The pair also plan to maximise the potential of the expanded customer base by diversifying its offer.
M&S CEO Stuart Machin told investors that over 700 M&S products had been added on to the Ocado website recently. “The range is getting better,” he said.
Last month Ocado revealed it had slashed price of over 100 everyday food essentials as it looks to increase its value offer.
The online grocer has reduced select items across its own brand, branded and M&S ranges by up to 25%.
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