Steiner: 'Waitrose Could Never Have Blocked Morrisons Deal'

Ocado boss Tim Steiner has claimed that Waitrose never had the right to block its deal with Morrisons despite an investigation by the supermarket's boss earlier this year.

Waitrose managing director Mark Price asked lawyers to examine its contract with Ocado in May after the delivery firm signed a £216 million partnership with Morrisons.

But Steiner told the Sunday Telegraph today: '[Waitrose] weren’t going to block the deal. They couldn’t block the deal. They had no rights to do so.'

Steiner said of the Morrisons deal: 'We struck a very good deal. At the moment, people seem to think we got the better half of that deal, but I think they will realise over time that Morrisons negotiated a fantastic deal for themselves.'

He said: 'This deal is enabling Morrisons to come to market in a quarter of the time it would have otherwise taken them at a cost that’s a fraction of what they would have spent trying to develop it in-house.'

Ocado has signed a deal with Morrisons that excludes the business from agreeing similar deals with other retailers in the UK. But Steiner said the scope for international is 'vast'.

'The UK is at the forefront of online groceries and we’re the most advanced player in the UK, so we’re the global leader in online groceries,' said Steiner.

He said supermarkets are spending 'multiple billions of pounds a year on technology infrastructure' to try to take their businesses online 'before Amazon and other independents come in'.

The Morrisons deal also allows Ocado to expand into non-food which represents 4 per cent of sales and could, Steiner believes, rise to 15 per cent.

Ocado's commercial director Jason Gissing told the newspaper he met Amazon founder five years ago who 'didn't understand' why the John Lewis Partnership has not bought Ocado outright. The partnership owned 44 per cent of Ocado at one time.

Gissing said, refering to Tesco's troubles in the UK, that the supermarket model looks increasingly broken while the delivery model can become increasingly efficient. 'One day we will be cheaper than any supermarket in this country,' he said.

'We have a different cost structure. [The time when we will be cheaper] is not that far away. At that point you’ll see the massive shift that you’ve already seen in electronics and travel,' he said, adding the firm will at that point offer 'Emirates Air quality at Ryan Air prices'.