July 22 2008

Ocado launches PR offensive in battle to win Waitrose home deliveries

Ocado finance and marketing head launches war of words with Waitrose as the companies go head-to-head over delivery options.

Mounting tensions between Waitrose and Ocado have come to a head this week with Ocado's head of finance and marketing, Jason Gissing, describing Waitrose and its parent the John Lewis Partnership as "a pain in the arse to deal with."

Gissing made the comment during an interview with the Guardian, as part of a PR 'offensive' to celebrate Ocado hitting £1billion in sales and to promote its planned expansion into non-food areas.

The interview comes at the end of what appears to have been an emotionally charged few months at both Ocado and at Waitrose after the supermarket decided to start promoting its own Waitrose Deliver service more heavily and Ocado decided to undercut Waitrose stores by price matching household brands against Tesco prices.

The Ocado initiative, which carries the slogan "Tesco prices. Waitrose quality. Ocado service," has led to a situation where customers who shop online via Ocado pay £40 a month less than those who shop in-store at Waitrose, says the Telegraph.

Ocado is in an interesting position. Although the John Lewis Partnership owns a quarter of the company, Ocado has only a 12-month rolling contract to deliver Waitrose goods and there doesn't seem to be anything in the contract to prevent Waitrose Deliver actively competing for business against Ocado.

In St Albans, for example, it appears that Waitrose has been leafleting consumers urging them to try Waitrose Deliver and highlighting items it can offer that are not available through Ocado – even though Ocado is based just a few miles up the road in Hatfield. "It is irritating. Does it make sense? Not to me," Gissing told the Guardian.

And in Cambridge, Waitrose is bringing back the delivery boy with the launch of a new bicycle delivery service that uses a bicycle trailer that can keep up to eighteen grocery bags chilled and frozen for up to two hours whilst they are pedalled to their delivery address. "This will truly be a bespoke service for Waitrose customers and, if successful, we will look at rolling it out to other branches," Waitrose retail director Tony Solomons explained.

"Our relationship with Ocado is complementary, allowing us to reach a broader number of customers," a Waitrose spokesperson told the Guardian.

"It is like a marriage – we love each other really," countered Gissing. But for how long?

by Sarah Clark (Web Editor)