It’s always nice to be vindicated, or, to paraphrase Keynes, it is better to be roughly right than precisely wrong.

It’s always nice to be vindicated, or, to paraphrase Keynes, it is better to be roughly right than precisely wrong. So it was with no small measure of relief that news came this morning of a tie-up between Morrisons and Ocado, something that we’ve been predicting for some time now. In honesty, to cover our backsides, we also added on some other long-shots about tie-ups between Ocado and M&S or Amazon, just to be on the safe side, but hey, a bit of hedging never hurt anyone.

Although not an acquisition of Ocado, the discussions to ‘license certain of Ocado’s existing and future intellectual property’ suggest that Morrisons is fully aware that cracking online grocery by 2014 with ‘home made’ tech is a bit of an ask. Fast-tracking on the back of Ocado’s expertise will be incredibly beneficial, although Morrisons has been at pains to point out that its entry into the online grocery market is not dependent on the outcome of Ocado discussions.

It sounds as though Morrisons has genuinely learned something from its investment in US business Fresh Direct, and the retailer sounds confident that it has sussed out a way to replicate its fantastic credentials in fresh and prepared foods in an online environment. Longer-term, this will surely involve a combination of store-picking, click-and-collect and bespoke warehouses/commissaries, but in the short term, speculation suggests a couple of ‘dark stores’ and perhaps some piggybacking on Ocado’s two customer fulfillment centres.

Elsewhere, there were few surprises in the results (save for the amazing revelation that re-specifying flower buckets and renegotiating napkin procurement could be quite so beneficial for the cost line). Convenience stores are on track, boosted by recent real estate gains from non-food retailers, and will be supported by extra dedicated distribution space, perhaps confirming that the ‘hub and spoke’ model of supplying c-stores from supermarkets is not a sustainable solution. The private label overhaul is progressing well with a resultant increase in participation and the apparently positive results from the store refurbishment programme continue, although there seems set to be further tweaks to the nature of the roll-out to make it less costly and more effective.  

In summary: better late than never in c-stores and online; must try harder in delivering and communicating promotional relevance; and keep up the good work on stores and range.