M&S is considering a “joint venture” with Ocado in which it would pay the online giant up to £900million for a 50% stake.
The partnership could be announced as soon as tomorrow and sees M&S join its grocery rivals with an online delivery business.
Most of its rivals already deliver food ordered online to Brit homes – but this deal would see M&S join the party.
Rumours of a tie-up emerged this morning before M&S confirmed “it is in discussions with Ocado Group plc regarding a joint venture in UK Retail”.
But it added: “There is no certainty that these discussions will result in any agreement or as to the timing of any such agreement.”
The deal, however, would see Ocado dump existing partner and M&S’s rival Waitrose.
Reacting to confirmation that the companies are in talks, retail analyst Bruno Monteyne said M&S could be a useful partner for the launch of Ocado Zoom, a one-hour delivery service.
“Ocado Zoom could be a major growth path for Ocado,” he said.
“We believe the food of M&S (ready meals, quality food) is perfectly suited for this more upmarket convenience shopping. M&S would boost the potential of Zoom in the UK.”
The news comes just weeks after Ocado was named Britain’s best online supermarket with M&S named the second top high street grocer.
In a report, Ocado came out on top for online shopping, receiving five star ratings for delivery slot availability, range of products and drivers’ service.
The talks also come just weeks after a fire destroyed Ocado’s distribution centre at Andover, one of its four UK centres which handles around 10% of customer orders.