What the M&S-Ocado strain actually tells us about where the money is going in UK retail infrastructure
In February 2019, Ocado and Marks & Spencer announced the kind of deal that gets called a bellwether.
A 50/50 joint venture, £750 million on the table and two very British brands, betting together that the future of grocery was automated fulfilment and a shared UK retail technology stack.
Seven years later, the partnership looks very different from the one investors imagined.
M&S now argues that the performance targets built into the original deal were never met, while Ocado has previously threatened legal action over the joint venture dispute. At the same time, Ocado has faced its own pressures.
By mid-2026, its shares were trading below their flotation price, around 1,000 jobs were being cut, and shareholders were reportedly calling for leadership changes.
Yet, in the same stretch of 2026, Ocado signed a new deal to roll the Ocado Smart Platform out across Asda's e-commerce and in-store fulfilment, with go-live set for early 2027. It dropped its exclusivity agreements with international partners, Kroger in the US among them, specifically so it could sell the Ocado Smart Platform to more retailers, not fewer.
Tim Steiner called 2026 the year Ocado is "well positioned to help more retailers capture market share in the world's fastest-growing grocery channel."
So which is it? Is Ocado a cautionary tale or a platform business finally proving its model?
We think both things are true at once, and that's the actual story. The M&S joint venture was never really the product, it was the first customer.
What's happening now is what happens to most infrastructure plays eventually: the relationship that built the technology is strained by the commercial realities of a 50/50 structure, while the underlying UK retail technology itself is commoditised and sold on to whoever's next.
Asda is next for the Ocado Smart Platform, then someone else will be after that.
If you're building or investing in UK retail technology right now, that distinction matters a great deal more than any single partnership headline, and we'd argue most of the sector commentary this year has been looking at the wrong half of the story.
From omnichannel to no-channel
Here's what we think most of the sector got wrong about "omnichannel" in the first place: it was always a stopgap word for a stopgap problem.
The retailers spending real money on UK retail technology in 2026 aren't trying to make their app and their store feel similar; they're trying to make the difference entirely invisible.
Next's Total Platform is the clearest UK example of what that actually looks like once it's built. Third-party brands don't integrate with Next, they move in, they plug directly into Next's own distribution and fulfilment infrastructure, effectively renting the retailer's operational backbone rather than building their own.
That's not omnichannel in the old sense of "we have a website and a shop." It's retail-as-a-service, and it's a meaningfully different sales pitch for any B2B startup trying to get in the door, because you're no longer selling a tool to a retailer.
You're asking to become part of one.
The loyalty layer is quietly becoming the profitable layer
On 1 July 2026, Nectar360 - Sainsbury's retail media and loyalty arm - became the first UK retail media network to pass IAB Europe's Retail Media Certification, following an independent audit by ABC. It's a narrow, technical milestone on paper: the certification covers Nectar360's display and video ad products across Meta, Google DV360 and YouTube, but it's a signal of where the actual profit is moving.
UK advertisers' spend on retail media networks is expected to top £4.8 billion this year, up from an estimated £4 billion in 2025, and retailers are now competing to prove their loyalty data is measurable and comparable, not just large.
Sainsbury's is taking a similar approach on the operations side, its five-year AI partnership with Microsoft, signed in 2024 as part of the retailer's "Next Level" strategy, uses shelf-edge camera data to direct staff to understocked shelves in real time and generative AI to sharpen online search.
Two different Sainsbury's initiatives, one underlying logic: the first-party data a retailer already owns is worth more once it's structured, certified and acted on automatically.
Compliance is becoming a product category
M&S has committed, under SBTi-validated targets, to cutting absolute Scope 3 non-FLAG emissions, as defined under the GHG Protocol, by 42% by FY2030 against a FY2023 baseline. We'd resist the urge to file that under sustainability and move on, because it isn't a press release sitting politely apart from the UK retail technology stack. It's a mandate that has to be threaded through supplier systems, logistics software and procurement platforms — because Scope 3 is precisely the category neither M&S nor any large retailer can measure by looking at their own operations alone. Somebody else's software has to do that counting for them. Expect carbon-tracing infrastructure to keep turning up inside procurement and supply chain tenders that, on paper, have nothing to do with sustainability teams at all.
What this means for B2B startups
The gap we'd point founders toward isn't inventory intelligence or in-store AI.
Both are crowded already, and most of the sharpest players in AI-driven returns prevention are still American, not British, a gap in this market that nobody seems especially keen to close. The real opportunity is the connective tissue nobody wants to pitch at a demo day: the certification layer that makes retail media networks measurable, the middleware that makes a "no-channel" promise actually true across a retailer's existing legacy systems, and the compliance tooling that turns a Scope 3 target into something a buying team can act on instead of dread.
None of that is as easy to sell as "we predict demand" or "we personalise checkout." It's slower, it's more technical, and it sells to procurement teams rather than marketing departments who'll never put it in a keynote, but it's also where the UK retail technology money is actually moving in 2026, not toward the flashiest AI layer, but toward whoever can make a retailer's existing partnerships, data and obligations work together without anyone having to fully trust each other.
Which, if the M&S-Ocado story tells us anything at all, might be the safer bet in this UK retail technology sector right now. We're not sure the founders chasing the shinier problem have noticed yet.
Also Read: The Real Reason UK Employee Engagement Keeps Falling in Startups
Sources:
Wikipedia (July 2026); Public Journal (March 2026); M&S corporate site; Ocado Group; Retail Technology Innovation Hub (June 2026); ESM Magazine (December 2025); Reuters via LSE.co.uk; IAB Europe (July 2026); ExchangeWire (July 2026); Retail Gazette (July 2026); ABC UK; Sharecast (October 2025); TechInformed (May 2024); Microsoft UK Stories; M&S Plan A sustainability disclosures; BusinessCloud (April 2026).
