Ocado posts slowdown in sales
Ocado saw first quarter revenue at its online joint venture with Marks & Spencer decline by 5.7% year-on-year after it was impacted by a return to a more normal pre-Covid trading environment.
However, sales were up 31.7% when compared to the first quarter of 2020.
While the retailer’s active customer numbers grew by 31% to 835,000, orders increased by 11.6% despite the tail-end impact of labour shortages early in the period.
Meanwhile, the average basket size of £124 was 15% lower than last year due to customer shopping behaviours returning towards pre-Covid levels.
Melanie Smith, Ocado Retail chief executive, said: “The last quarter has been encouraging for Ocado Retail despite the clearly evident challenges the industry and consumers are facing. Active customers have increased by 31%, demonstrating the continued strong appetite for Ocado’s unique and market-leading brand of online grocery.
“Of course, as we have seen since the end of Covid restrictions, the value of the average basket and shape of the week continue to normalise as we return towards the rhythm of our pre-Covid lives. Given that we are comparing a post-lockdown quarter this year with a lockdown quarter last year, this has meant that sales were down 5.7% in the quarter, not helped by the softening market overall, with smaller baskets offsetting the increase in the number of customer transactions in the quarter.”
Ocado said it worked closely with suppliers to actively manage inflationary pressures in the period. It has also moved certain retail prices, where costs could not be mitigated, in line with the rest of the market.
Looking ahead, the company said full year revenue growth might be closer to 10% than the mid-teen growth it predicted previously.
Smith added: “Long term, we are confident that the trajectory of growth remains positive. That growth is underpinned by our quality customer service and high customer satisfaction (we were recently named Which UK’s recommended online supermarket) and enabled by our investment in new hyper-efficient automated customer fulfilment centres which bring wide ranges, the freshest produce, and the best on-time delivery in the market, all at fair value, across the full range of price points, to our fast growing number of UK customers.”
Earlier this week, Ocado confirmed that it is partnering with Auchan Poland to help the retailer develop its online business using the Ocado Smart Platform.
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