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Troubled U.K. Online Grocer Ocado May Benefit From Brexit Fallout

June 28, 2016: 12:00 AM EST
O woe is online grocer Ocado. British supermarket chain Morrison is complaining that its deal with Ocado has been profitable for Ocado only, and signals it may back out. The company faces competition on its own turf from Amazon Fresh, which has made a supply deal with Morrison. And Waitrose, whose products Ocado sells, may pull out of its arrangement. These and other problems – it has failed to attract any European or U.S. partners – have depressed Ocado’s stock values by 25 percent since April. However, Ocado may benefit in several ways from the fallout of the recent Brexit referendum. The British pound is taking a beating versus the dollar, so an overseas supermarket will pay less to have Ocado manage its online grocery business. It also means that a potential buyer would pay less to buy Ocado outright.
Andrea Felsted, "Ocado's Found a Silver Lining in Brexit", Bloomberg Gadfly, June 28, 2016, © Bloomberg L.P.
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