Ocado Group boss Tim Steiner has vowed he won’t “walk away” from money Ocado is owed as part of its retail joint venture with M&S, with an ongoing spat over performance-linked payments showing no end in sight.

Tim Steiner

Source: Peter Searle

Tim Steiner: “We believe that we have a very solid case to get full payment”

Speaking this morning, Steiner said he was confident that Marks & Spencer owed Ocado “a substantial amount of money” and refused to rule out potential legal action, but said he hoped it would not come to that.

“We believe that we have a very solid case to get full payment, although we know that M&S may not entirely share that view,” he said.

“We’re happily having conversations with our partners, and we would much rather solve this in a nice and constructive way, which is what we’re working towards doing.

“We are very confident that we are owed a substantial amount of money and, ultimately, I hope that we’ll never get there, but we will not walk away from that amount of money.”

M&S is due to pay Ocado a final instalment of £190.7m as part of the £750m Ocado Retail partnership between the two businesses, launched in 2019.

However, in its latest annual results published today, Ocado confirmed that the joint venture had “failed to meet the performance measures” for the year needed to secure an automatic payment of the instalment.

Accounting rules estimate that a last payment of £28m would be deemed a “fair value” as a result, a figure Steiner lambasted as “ludicrously low”.

In a statement, Ocado said it believes it will secure a greater sum from M&S, either through a “formal litigation process or settlement”.

An M&S spokesman said: “M&S remains committed to the turnaround strategy for Ocado Retail and our focus is on working with them and Ocado Group to deliver it. On the specific issue of the contractual contingency payment, our advice is that the financial performance of Ocado Retail means the criteria for the performance payment was not met.”