05 Tim Steiner

It has been one of the stories of 2010. But while Ocado continues to divide opinion in the City and its share price continues to head south, there’s no doubt the business remains a trailblazer when it comes to online grocery retailing.

Founded by Steiner and two former Goldman Sachs colleagues - Jason Gissing and Jonathan Faiman - Ocado has become a darling of the metropolitan middle classes for its unparalleled customer service. Its distribution warehouse in Hatfield is a model of a high technology operation, with crates of goods flying around on a sophisticated network of conveyors with minimal human input.

It’s an operation the cerebral Steiner is intensely proud of. But it doesn’t make a pre-tax profit, and never has, and that’s a subject Steiner and his fellow founders are much more sensitive about. They’re adamant that it can and will make money, but critics argue that in the UK’s intensely competitive grocery market the model simply doesn’t work, and never will.

With a focus and belief in what they do that can sometimes come across as arrogance, Steiner and his colleagues have made their fair share of adversaries as well as many admirers. And with the price of a new supply deal with Waitrose being

that the John Lewis Partnership-owned supermarket will be able to sell online within the M25 from next year, competition is only going to get stiffer.

But while much of the criticism of Ocado has been valid, as a retail operation and an online pioneer there is much to celebrate about the business. It has pioneered selling groceries on the web, and shown that - from an operational point of view at least - that running an online food business through the use of one central distribution hub can work. There are challenges ahead, no doubt, but Ocado remains an exemplar of online retail innovation.