Ocado is hoping to secure a new long-term supply contract with Waitrose in a move that could bring about a long-awaited stock market flotation.
The internet grocery retailer, which has an exclusive agreement with Waitrose, is aiming to re-negotiate the deal to secure more favourable terms, according to reports in the Telegraph.
Waitrose now supplies Ocado on a one-year rolling contract, but detailed negotiations for a longer-term deal between Waitrose and Ocado are expected to begin within weeks.
Insiders said a long-term contract between Waitrose and Ocado would be an essential precursor to a flotation of Ocado. “The relationship with Waitrose is key,” said one. “They will need to set out the details in full if they do push ahead with a float.”
Ocado founders have said they want to float the business. "Now we are Ebitda [earnings before interest, tax, depreciation and amortisation] positive, we can float the business, we can raise money,” Jason Gissing, one of the co-founders, said recently.
The relationship between Waitrose and Ocado has allowed Waitrose to expand into areas of the country where it has no stores, and meant that Ocado could take on the premium brand.
But a recent expansion of Waitrose Deliver, the supermarket’s own store-based internet service, has caused some tension.
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