WM MORRISON SUPERMARKETS LONDON (Reuters) - British online grocer Ocado (>> Ocado Group PLC) said it believed Morrisons (>> WM Morrison Supermarkets PLC) was "pretty happy" with its 25-year contract to operate the supermarket's online delivery service and did not expect its new boss to seek a re-negotiation.
Former Tesco (>> Tesco PLC) executive David Potts will start as Morrisons CEO on March 16 and there has been analyst speculation he may not see the over 200 million pounds ($301 million) contract with Ocado as the way forward.
However, Ocado's chief financial officer Duncan Tatton-Brown played down the prospect of any re-negotiation of a contract it regards as watertight.
“I’m sure David Potts when he joins will have quite a lot of things on his plate ... I don’t think he needs to worry so much about his e-commerce business, I think that’s doing quite well," Tatton-Brown told reporters on Tuesday.
"Morrisons have been very pleased with the operations and the scale of business that they’ve built up ... I think they’re pretty happy with it, (and) we know the terms of the contract."
The CFO said Ocado CEO Tim Steiner did plan to meet Potts, though he stressed that was a requirement of the contract.
A spokesman for Morrisons declined to comment. Last month new Morrisons chairman Andrew Higginson said he thought the Ocado agreement was one of the better deals signed by ousted CEO Dalton Philips.
Tatton-Brown was speaking after Ocado posted a slight acceleration in quarterly sales growth, sending its shares up 3 percent.
The firm, whose range includes products supplied by upmarket grocer Waitrose [JLP.UL], said gross retail sales rose 15.2 percent in the 12 weeks to Feb. 22, its fiscal first quarter, versus growth of 14.9 percent in the final quarter of its 2013-14 year.
Average orders per week increased 18.1 percent to 183,000, though average order size dipped 2.4 percent to 114.72 pounds.
"Notwithstanding the uncertainty that remains in the marketplace, we expect to continue growing slightly ahead of the online grocery market," said Steiner.
Ocado signed its first third-party deal with Britain's fourth biggest supermarket Morrisons in 2013. That helped the firm to last month report a pretax profit for the 2013-14 year, the first in its 15-year history. It also said in February it aimed this year to seal its first technology deal with an overseas retailer.
Shares in the firm, which have had a rollercoaster ride since they debuted at 180 pence in 2010, were up 11 pence at 382 pence at 0918 GMT, valuing the business at 2.22 billion pounds.
($1 = 0.6651 pounds)
(Editing by Kate Holton and Mark Potter)
By James Davey
