Patrician Supermarket Ploughs £20m More into Online Shopping

20 June 2002

Waitrose, preferred purveyor of high quality supermarket merchandise to Britain's middle class, is rolling up its double-cuffed sleeves to engage in online fisticuffs with Tesco – the nation’s largest supermarket group and undisputed leader in web-activated delivery of groceries direct to homes.

Together with investment bank UBS, the John Lewis Group, an employee-owned retail co-operative and parent of Waitrose, is to plough another £20 million ($29.83m; €31.21m) into the cyber venture in which the retailer holds a 40% stake.

But unlike the Tesco service, which single-mindedly capitalises on its brand name, the Waitrose label – one of the UK’s most respected retail brands – is not linked to the online business which bears the mystic moniker Ocado, derived from avocado.

Nor is Ocado emulating Tesco’s successful and commercially proven system of servicing online customers direct from its supermarkets. Instead it has opted to go down the dedicated warehouse route, the fixed overheads of which have been a major contributor to the downfall of several online grocery ventures in the USA.

But this enables Ocado to offer a wider, larger and more customer-centric product range, claims John Lewis’s development director Charlie Mayfield.

“The delivery area for Ocado has been built postcode by postcode around its Hertfordshire base [a massive 300,000 sq ft warehouse nearby London’s M25 orbital motorway] over the last six months to ensure it maintains the highest standards of customer service as the delivery coverage extends,” Mayfield says.

The new money is additional to the £46 million committed to the venture prior to its launch in February – but no-one is saying whether the latest cash injection is a lifejacket or part of the original business plan.

Ocado’s rollout schedule forecasts 65% coverage of all UK homes within five years.

Data sourced from:; additional content by WARC staff