Ocado Drops Its £190.7m Lawsuit Against M&S and Shares Surge 12% — But Can a Truce Paper Over the Cracks in This Partnership?

Shares in Ocado Group jumped 12.3% to 211.60p as investors cheered the company's decision to walk away from a £190.7 million legal claim against Marks & Spencer — removing a cloud of uncertainty that had hung over the stock for more than two years. Ocado had claimed the payout from M&S was tied to their joint online grocery venture, Ocado Retail. But the rally may be masking a more complicated picture beneath the surface.

• Dropping the Claim Means Losing Real Money to Clear the Air. M&S paid £562m upfront for a 50% stake in Ocado Retail in 2019, with a further £190.7m contingent on the venture meeting undisclosed financial targets by November 2023.

Those targets were not met , and Ocado had estimated it was owed at least £28m, while seeking more through litigation or settlement. Now it gets nothing. Yet the market is treating the write-off as a positive because it eliminates an ugly, distracting fight between two partners who must cooperate to grow.

• The Joint Venture Is Finally Making Money — and That's What Matters Now. Ocado Retail's EBITDA surged 119% to £73 million in the first half of 2026, up from £33 million , while revenue rose 15% and orders climbed 13%.

The business posted a £12m pre-tax profit versus a £17m loss a year earlier. For a venture that burned cash for years, this profitability shift changes the maths: a growing, profitable JV could eventually deliver far more than the one-off £191m payout ever would.

• M&S Is Holding Expansion Hostage Until Ocado Cuts Better Terms. Here's the catch investors shouldn't ignore. M&S has reportedly declined to approve additional warehouses or commit more volume to Ocado's existing sites until revised commercial and technical terms are agreed.

M&S is said to be seeking greater operational efficiencies, improvements to systems, and more favourable pricing for warehouse capacity. In short, the lawsuit may be over, but the next negotiation could prove equally thorny — and directly controls how fast this venture scales.

• The Wider Business Still Has Deep Problems. Ocado reported a £33m after-tax loss in the first half of 2026 , and excluding one-off closure fees from Kroger and Sobeys, group revenue grew just 1%.

The share price has slumped more than a fifth this year , and CEO Tim Steiner has confirmed he will step down in 2028. Investors got a relief rally. Whether it becomes a sustained recovery depends on whether Ocado can turn a legal truce into a commercial partnership that actually grows.