Ocado finishes the year on a high

Written by Peter Walker

13/12/18

Ocado has reported double-digit increases in revenue and average orders per week during its fourth quarter, although average order value fell during the period.

For the 13 weeks ending 2 December, the online grocery retailer saw sales rise 12 per cent to £390 million, up from 11.5 per cent growth in the previous quarter. The average order value dropped by one per cent to £104.91, but average orders per week rose 13.1 per cent to 320,000.

A statement explained that the new capacity at its robotic distribution centres in Andover and Erith enabled double-digit growth in new customer acquisitions.

Chief executive Tim Steiner said: “Although in many respects 2018 has been a transformative year for Ocado, the story has only just begun.”

In July, Ocado forecast retail revenue growth of between 10 and 15 percent for the full year, although at the half-year stage, reports revealed a £9 million loss caused by continued investment in expanding IT systems and warehousing capacity.

Shares in the retailer have risen 126 per cent over the last year, following several overseas technology partnerships, including its biggest yet with US grocer Kroger.

Jat Sahi, digital lead for retail at Fujitsu, commented that the results highlight the importance for retailers and grocers to continue to innovate and find new offerings, or else risk losing their market shares to companies who are willing to go that extra mile to meet the advancing needs of customers.

“Thanks to digital disruption, the retail landscape is evolving at a dramatic rate, and it can be hard for retailers to keep up,” he continued. “Ocado has made significant investments in its technology operations and partnerships, finding new and improved ways to provide experiences that customers today expect.”

Tim Reay, head of grocery at Salmon, also saw Ocado’s progress as a beacon to other UK retailers.

“Ocado’s growth in sales highlights the importance for brands to maintain investments in technology to strengthen their e-commerce strategy,” he stated, adding: “As consumers move towards online shopping, supermarkets are under pressure to have a fast and reliable service - these results can be seen as a victory for e-commerce - it is becoming clear that companies can run dependable online supermarkets.”