Ocado capacity issues restrict growth
Online grocery retailer Ocado said in its AGM statement today that it expects gross sales growth to reach 21% for the first half of the financial year (24 weeks to 15 May).
Sales growth in Q2 had been lower than Q1 as a result of “capacity constraints and the higher incidence of holidays” but this had been expected. The retailer said it would continue to drive profitable growth as EBITDA conversion on incremental sales had increased further and was expected to be approximately 12% for H1, up over 30% from 9.1% in H1 2010.
The statement said that the Hatfield customer fulfilment centre ("CFC") remained “capacity constrained” in the short term, and that investment was continuing at the centre to increase weekly order capacity and to expand the range of products offered to customers. In addition, the construction of a second CFC at Dordon in Warwickshire had now started and was due for completion at the end of 2012.
The retailer also announced that it had signed up to a lease on a 100,000 sq ft warehouse in Hertfordshire from where it would be developing its new non-food business.
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