Ocado has walked away from a long-running fight to collect roughly £190 million from Marks & Spencer. The dispute centered on their joint online grocery business, Ocado Retail, and had threatened to end up in court.
Quick Answer
Ocado Group has dropped its claim to a final £190.7 million payment from Marks & Spencer (M&S), according to reporting from The Times. The money was tied to a performance target in their 50-50 joint venture, Ocado Retail, which sells M&S food online. The venture missed that target, M&S valued the payment at zero, and Ocado had threatened legal action before quietly standing down this week.
Key Takeaways
- Ocado will not receive a final £190.7 million payment it had been pursuing from M&S.
- The payment was tied to performance targets for Ocado Retail, their joint online grocery venture, which were not met.
- Ocado had previously threatened “all available means,” including legal action, to recover the money.
- The two companies are reportedly now focused on separate talks about expanding warehouse capacity.
- Ocado shares moved only modestly on the news, suggesting the market had largely expected this outcome.
What Happened
In 2019, M&S paid Ocado roughly £562 million upfront for a 50% stake in Ocado Retail, the joint venture that lets M&S sell its food range online through Ocado’s delivery network. The deal also included a further payment of up to £190.7 million, due if Ocado Retail hit certain performance targets by the end of its 2023 financial year.
Those targets were not met. M&S valued the outstanding payment at zero. Ocado disagreed, arguing that the Covid-19 pandemic had affected the venture’s customer numbers and capacity in ways that should be accounted for under the terms of the deal. In 2024, Ocado chief executive Tim Steiner told shareholders the company was “very confident” it was owed a substantial sum and had a strong negotiating position.
According to The Times, Ocado has now abandoned that pursuit. No final payment will be made.
Why Ocado Backed Down
Neither company has published a detailed public explanation for the timing. But the shift comes as Ocado and M&S are reportedly in separate discussions about expanding warehouse capacity and order volumes for Ocado Retail, which posted close to £1.8 billion in sales in the first half of 2026, up 15% year over year. M&S has reportedly been unwilling to commit to that expansion unless commercial terms between the two companies improve.
Dropping the payout claim may reflect a broader trade-off: giving up on a one-time payment in exchange for a better long-term commercial relationship with a joint venture that’s still growing.
The Bigger Picture for Ocado
The dispute lands at a difficult moment for Ocado Group. The company reported a £33 million loss after tax in the first half of 2026, a steep reversal from a £605 million profit in the same period last year, driven by weaker results in its technology and robotics division, which licenses automated warehouse systems to grocers worldwide. The retail joint venture with M&S remains one of the healthier parts of the business.
For M&S, the outcome removes a source of legal and financial uncertainty from its books without requiring a cash outlay, at a time when the retailer has been focused on rebuilding after a costly cyberattack in 2025.
What This Means for Investors
For Ocado shareholders, the dropped claim removes a modest potential upside but also clears away legal uncertainty and cost. For M&S shareholders, it removes a contingent liability from the balance sheet discussion entirely. Neither company’s shares moved sharply on the news, which suggests investors had already priced in a low likelihood of Ocado winning the full amount.
The more important signal for both stocks going forward is probably the warehouse capacity talks, since that relates to ongoing revenue rather than a one-time payment.
FAQ
Why did Ocado drop the £190m claim against M&S?
Neither company has given a detailed public reason. Reports link the timing to separate, ongoing talks between the two companies about expanding Ocado Retail’s warehouse capacity.
What is Ocado Retail?
Ocado Retail is the 50-50 online grocery joint venture between Ocado Group and Marks & Spencer, formed in 2019, which sells M&S food products through Ocado’s delivery platform.
Did Ocado ever sue Marks & Spencer?
No. Ocado threatened legal action and said it would use “all available means” to pursue the payment, but it did not file suit before dropping the claim.
How is Ocado Group performing financially?
Ocado reported a £33 million loss after tax in the first half of 2026, compared with a £605 million profit a year earlier, driven by weaker results in its technology and robotics licensing division.
Sources
- City AM — Ocado lets Marks & Spencer off hook in £190m payout dispute
- The Grocer — Ocado Group drops battle for £190m from M&S
- MarketScreener — Ocado Said to Drop £190 Million Payout Dispute
This article is for general information and is not personalized investment advice.
Finance Writer | Wall Street Sights
Gulraj Ansari covers U.S. markets, business, investing, artificial intelligence, and global economic trends. His reporting focuses on delivering clear, research-backed, and reader-friendly financial insights.
