Amazon interest in Ocado takeover rumour

Ocado Share Price on rumour of Amazon TakeoverOcado, the online supermarket delivery company which trades in partnership with John Lewis’ Waitrose have seen their share price sky rocket following rumours of a take over by Amazon.

A deal would make a lot of sense for Amazon. It would be substantially cheaper to rebrand Ocado and take over their customers, warehouses and fleet, than set up a rival operation from scratch.

Amazon are already making their first foray’s into the supermarket arena with the recent launch of their Amazon Pantry service. However they’re already struggling with consistency of product supply and have obvious gaps in their range.

Ocado have their own issues, having allied themselves with Waitrose they’ve an appeal to what in the past would have been described as the middle classes. An alliance with a second supermarket might widen their customer base, but a take over by Amazon would make half the country potential customers.

Of course Ocado won’t be a total solution for Amazon. Whilst they have a broad coverage, there are swathes of the far flung reaches of the UK to which they don’t deliver (Are you in an Ocado delivery area?). Amazon in comparison prefer to cover the whole country, although they are rolling out services such as Prime Now in major cities.

Since the news Ocado’s share price has subsided a little but is still trading around 7% up.