London Daily

Focus on the big picture.
Monday, Jul 07, 2025

Ocado aims to raise £575m from investors to fund tech arm expansion

Ocado aims to raise £575m from investors to fund tech arm expansion

Firm wants to ‘invest in innovation at faster pace’ and help clients as online grocery market grows
Ocado is aiming to raise £575m from investors to fund the expansion of its technology arm, which enables overseas retailers to sell groceries online. It has also agreed a new £300m credit facility with a syndicate of international banks.

Ocado said it wanted the cash to “invest in innovation at a faster pace” and help its clients, which include the US supermarket chain Kroger and the French grocer Casino, to accelerate the shift to online shopping.

The online delivery specialist’s plan was announced late on Monday but came as Fitch downgraded its credit rating to negative from stable. The ratings agency said it would take longer than expected for Ocado’s business building hi-tech warehouses for overseas retailers to become profitable.

“Our rating reflects the growing scale, upfront investments and execution risks associated with the progress on 40 of its international [distribution centres] over the next four years,” Fitch said in a note.

Fitch said the pressure on profits would be temporary, but short-term profit margins would take a hit from customers spending less per order amid the increasing cost of living and higher labour, marketing and energy costs.

Clive Black, a retail analyst at Shore Capital, said Ocado needed to raise cash as it was funding “huge research and development, enormous operating costs and capital expenditure, and it doesn’t generate the money to cover this experiment”.

He said: “It’s symptomatic of an interesting business that doesn’t make enough money to cover its project.”

Ocado’s share price has more than halved in the past year to 831p, amid concerns that it failed to capitalise on the shift to online shopping during the pandemic when trading at supermarkets and high street stores was restricted around the globe.

The company’s hi-tech warehouses struggled to adapt to the rapidly changing retail landscape in the UK over the past two and a half years, while the major supermarkets Tesco, Sainsbury’s, Morrisons and Waitrose all quickly ramped up deliveries via their stores or partnerships with companies such as Deliveroo.

In May this year, Ocado warned that its sales growth would be less than half the rate it had hoped for as the cost-of-living crisis and return to office work and dining out hit trade.

The online grocer, which is partly owned by Marks & Spencer, said it now expected growth of less than 5% for the year to the end of November compared with 10% anticipated.

The forecast came after sales fell 8% in the two months to 25 April compared with a 5.7% decrease in the previous three months. Shoppers have been buying fewer items than usual.
Newsletter

Related Articles

0:00
0:00
Close
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
×