Tesco and Ocado clash over ad claims

Fri, 14 Mar 2008

Supermarket giants Tesco and Waitrose are set to clash over comparative advertising, with Tesco rubbishing claims that online grocery service Ocado can match its prices.

Tesco is expected to make a formal complaint to the Advertising Standards Authority today (Friday) about claims made by Ocado, Waitrose's online delivery service, in press advertisements published in national newspapers earlier this week.

The Ocado advertisement claimed it would match Tesco's prices on "all household brands". But Tesco says it is still cheaper on 2,500 products and that Ocado is up to 65% more expensive on some products.

It was recently reported that total losses at Ocado reached almost £300m after an estimated £30m loss in 2007. Waitrose parent company John Lewis owns a 24.1% stake in the internet retailer.

Ocado made a £43m loss in 2006 according to the last accounts filed at Companies House. Sales rose by 53% to £230m in the year to December 3, 2006.

Recent reports suggest that Ocado's founders – ex-Goldman Sachs bankers Jason Gissing, Jonathan Faiman and Tim Steiner – want a flotation as early as this year.