GO
Loading...

Ocado founder steps down as online goes mainstream

Jason Gissing, one of the ex-Goldman Sachs bankers who founded U.K. online supermarket Ocado, is leaving the company as it prepares to compete with the biggest U.K. retailers.

The news came as the retailer announced sales rose by 17 percent to £843 million ($1.4 billion) in 2013, and set up its stall as a future market leader. However, its annual loss increased to £12.5 million in 2013, despite analysts' hopes that it would turn a profit this year - sending its share price down in morning trade on Tuesday.

Internet shopping is moving from niche to mainstream with the online players set to match the market value of their high street rivals before long, according to Tim Steiner, chief executive of Ocado, who co-founded the company with Gissing.

"This is going to become a mainstream market. We see no reason why we can't have a growing market share," Steiner told CNBC.

He believes that Ocado, which started out distributing goods from Waitrose, the U.K. supermarket part of the John Lewis partnership, could eventually become the size of one of today's mid-market players.

Ocado's stock rose most in the EuroStoxx 600 last year. The company initially had a troubled history on the stock market, over worries about its relationship with Waitrose and whether Steiner and Gissing had enough experience in the retail industry.

Jeff Titcomb | Getty Images

Last year, Ocado signed a distribution deal with U.K. supermarket chain Morrisons -- a move that was called the equivalent of "Defcon 1" by Waitrose head Mark Price. Its deal with Waitrose runs until 2017.

(Read more: Bleak Christmas for UK supermarkets)

The Morrisons deal is a 'vindication' of Ocado's business, according to Steiner. He described criticism from Shore Capital analyst Clive Black that the deal meant Ocado had admitted defeat as a grocer as "frankly incorrect."

"We always planned to monetise our intellectual property," Steiner said.

Sir Stuart Rose, Ocado chairman and former Marks and Spencer chief executive, said: "Jason and Tim started Ocado from scratch just over 14 years ago. Today the business is valued at £3 billion, employing thousands of people, helping consumers around the UK in their busy lives.

"They have laid the foundations of a world-class business."

Contact Earnings

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More