Switch to online ‘permanent’ says Ocado boss

Ocado’s chief executive Tim Steiner has said the shift to online shopping during the COVID-19 has “permanently redrawn” the retail landscape.

Steiner made the comments as the grocery delivery giant announced that first half revenue had risen 27 per cent to more than £1 billion as shoppers flocked online for grocery deliveries during the pandemic.

In a statement Steiner said: “The world as we know it has changed. As a result of Covid-19 we have seen years of growth in the online grocery market condensed into a matter of months; and we won't be going back.”

He added: “"We are confident that accelerated growth in the online channel will continue, leading to a permanent redrawing of the landscape of the grocery industry worldwide."

The company experienced such high volumes of demand for delivery slots during the early weeks of the crisis that it was forced to temporarily suspend its app and turn away new orders.

The company saw 42 per cent sales growth during the start of the lockdown period - the most of any major UK supermarket - moving its market share to 1.7 per cent following unprecedented sales.

Ocado, which has delivered groceries for Waitrose since 2002, is due to switch to a new £750 million joint venture with Marks and Spencer in September when its Waitrose contract expire and to deliver more than 5,000 M&S food lines and 1,600 M&S home and clothing lines.

However, despite the rise in sales revenue, loss before tax was £40.6m in the six months to the 31st May, which the company attributed to an increase in investment to handle the increased demand during the lockdown period.

The company also announced a 58 per cent rise in fees for its third-party grocery and customer fulfilment platform following a rollout of the technology in Groupe Casino in Paris and Canadian retailer Sobeys.

Steiner said the changed retail environment “will mean more demand for Ocado Smart Platform from current and prospective partners and our recent fundraising will ensure that we are able to meet that demand. It will also mean that we can invest more capital in innovation for our partners and further expand our leadership as the world's preeminent solutions provider in online grocery.”

He added: “Seizing the future will, of course, require the same mix of constant questioning and innovation, focus, and quiet determination that has brought us so far. I have no doubt that we will rise to the challenge, taking advantage of a scale of opportunity that we have never seen before.”

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