Should you put Ocado on your shopping list? Remember what Adam Smith said

Martin Vander Weyer’s Any Other Business

The flotation of a business that has carved a big slice of a fast-growth consumer market within less than a decade of its start-up ought to be a cause for celebration: an example of capitalism doing what it’s supposed to do in support of entrepreneurs; an affirmation that markets are back in business after their nervous breakdown two years ago. But the share offering for the online grocer Ocado, for which a price will be struck on 21 July, has provoked more of a City brawl than a champagne reception. Some fund managers are enraged by the indicative pricing, which values Ocado at up to £1.3 billion even though it lost £26 million last year on £402 million of sales. And there are so many health warnings in the prospectus that some analysts think the £200 million capital-raising looks more like a rescue than a step up the ladder to success.