Tim Steiner, CEO of Ocado Group, is also a co-founder of the company. (Chris Ratcliffe/Bloomberg)
key takeaways:
- Ocado Group said on July 6 that CEO Tim Steiner would step down at the start of its 2028 financial year after accelerating succession planning.
- Shares fell 4.5% on July 6 amid concerns about Ocado’s fulfillment-centre model, which could fall to around 25% by 2026.
- Steiner will remain in the founding role until 2029 as Ocado works to move toward smaller store-based automation solutions.
Ocado Group CEO Tim Steiner will step down at the start of its 2028 financial year, after a boardroom feud at the British online grocery delivery company caused the stock to tumble.
The move to accelerate succession planning was prompted by chairman Adam Warby, although it sparked a backlash from some shareholders who wanted to retain company co-founder Steiner. Ocado said on July 6 that Steiner was working with the board on the succession process and that he would remain with the company in a “founding” role until 2029.
Ocado shares fell as much as 4.5% in London on July 6, a fall of almost 25% so far this year.
Steiner has in the past touted Ocado as the “Tesla of grocery,” but its shares have fallen more than 90% since their peak in the pandemic, as changes in COVID-era shopping habits proved temporary and the company struggled to convince investors of the feasibility of its robot technology.
Ocado, once one of the UK’s great technology hopes, is cutting jobs to reflect a growing trend among grocers to handle more online orders in stores rather than in fulfillment centres. Major customers, including Kroger Co. and British supermarket Morrisons, have pulled back in recent years.
Cincinnati-based Kroger is ranked No. 31 on Transportation Topics Top 100 list of North America’s largest private carriers.
Connected: Ocado ends exclusivity terms after setbacks in Kroger deal
This has led to calls for Ocado to move away from its original model of large and capital-intensive distribution centres. The company struck a deal in May to replace and upgrade British grocer Asda’s e-commerce infrastructure with its own online sales platform.
“This is difficult at this juncture in the business given the problems faced by the larger (customer fulfillment center) model and the need to move toward smaller store-based automation solutions,” Bernstein analyst William Woods said in a note. “It will be challenging to replace the founder and visionary of the business.”
