M&S set to launch home delivery service

M&S and Ocado could hook up in an online delivery service. Picture; Katie Collins/PA Wire
M&S and Ocado could hook up in an online delivery service. Picture; Katie Collins/PA Wire
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It’s one of the nation’s favourite food halls, supplying ­everything for dinner parties to fancy brunches, dinners-for-one and humble sandwiches.

But high street stalwart Marks and Spencer could now be set to offer food shoppers online home delivery for the first time.

Shares in online grocer Ocado surged eight per cent yesterday following reports it is to launch negotiations with M&S on home delivery.

M&S, which has long resisted the online trend, confirmed the launch of a “soft trial” online and home delivery services in the autumn.

The store has conceded it does not make economic sense to ignore the fastest growing section of the UK’s £180 billion grocery market.

Ocado already has a deal to deliver orders for Morrisons. But changes to the contract last summer meant it is no longer exclusively tied to the supermarket and is only barred from working with Tesco, Sainsbury, Asda, Aldi and Lidl.

M&S is not included in that list, leaving the door open for a potential deal. Both Ocado and M&S declined to comment.

Steve Rowe, M&S chief executive, last week said that the company had been undertaking a review of food online, aware that its customers’ ­preferred method of shopping could change

He said: “It has not cost us anything over the last five years by not being online with food. Our customers haven’t moved yet, but they will and we need to ensure that we are ready with the right response. There are unanswered questions over what this means for M&S.”

Professor Paul Freathy, of the Institute of Retail Studies at Stirling University, said the deal made good business sense and M&S, like other stores, needed to embrace online shopping to attract a younger generation of shoppers.

He said: “This would allow M&S to tap into an existing distribution market rather than doing it from scratch which strategically makes sense. It’s also a good move from Ocado’s point of view as it will link it to a major brand.

“At the same time this is an attempt to attract a new demographic of customer. They have their loyal band of customers who shop there week in, week out, and some will shop online, but they need to win over younger, technically-savvy shoppers who value quality food but don’t have the time to go into town to shop.

“M&S can’t go on denying this major channel, it’s a weird commercial practice to ignore the online market.

“It is reminiscent of around 15 years ago when they were really reluctant to let customers use credit cards such as Visa and Mastercard and wanted cash, cheques or the M&S card instead.”

Rowe, who began his retail career at 15 as a Saturday boy at an M&S store in London, and took over as chief executive last April, is seeking to revive the declining profits of the 132-year-old retailer.

He has already announced plans to shut 30 UK stores and make 45 more food-only.