Ocado shares rise after M&S deal report

Ocado shares rose as much as 6.7% in London trading after a report suggested it may agree a deal with Marks and Spencer enabling the larger firm to make home deliveries.

Shares in M&S also rose.

M&S could buy distribution centres and vans from Ocado, the Mail on Sunday reported. It has been exploring options for food delivery online in a bid to catch up with rivals such as Sainsbury’s.

Both companies declined to comment.

Ocado currently has a deal with southern England-focused Waitrose, which is due to come to an end in September 2020.

M&S has been experimenting with home delivery since 2017, when it opened a trial in north London to offer a small range of ready meals. Its website already offers wedding cakes, party food and alcoholic drinks for collection, but it lacks a delivery network the likes of Tesco, Morrison, Sainsbury’s or Asda have.

After those earlier gains, Ocado shares settled to stand 3% higher at 975p. Marks and Spencer shares rose 2% to 295p.

M&S, founded in 1884, has been struggling in recent years to keep up online in both food and clothing. It said in November that sales excluding newer stores, were down 2.2% for the six months to the end of September. Food sales were down 2.9% and clothing and home sales slid 1.1%.

A deal of any kind is not certain, the newspaper reported.