Ocado Group is facing intensified pressure from investors who are questioning the long-term viability and promised returns of its technology-focused business model. Doubts are growing as the company's shares recently dropped below the 180p price at which it floated in 2010, marking a significant collapse from its pandemic-era highs of over £29.
The grocery technology specialist's strategy of selling automated warehouse robotics to international partners has been hit by setbacks, including warehouse closures by partners Kroger in the U.S. and Sobeys in Canada. This has amplified concerns about whether the heavy investment in its tech arm can generate sustainable profits, with the company reporting a widened pre-tax loss of £378m last year despite a rise in sales.
Adding to the pressure are governance concerns regarding co-founder and CEO Tim Steiner's compensation. Analysis revealed he has received nearly £100 million in pay and share awards since the 2010 IPO, a figure that has sparked criticism about fairness and proportionality given the company's recent share price performance. These issues arise amid reports that Ocado is searching for a potential successor to Steiner, further unsettling investors.