Ocado gross sales surge amid shift to on-line procuring

Ocado delivery driver Image copyright PAUL ELLIS/AFP VIA GETTY IMAGES

Online grocer Ocado noticed its gross sales rocket greater than 50% within the third quarter of the yr as extra individuals shopped on-line in lockdown.

Sales at Ocado Retail, its three way partnership with Marks & Spencer, and beforehand Waitrose, had been £587.3m within the 13 weeks to 30 August.

The agency mentioned development was stronger than within the second quarter, whereas weekly orders stood at 345,000, up almost 10%.

But it mentioned uncertainties remained over the “ongoing impact” of the pandemic.

The agency’s change to delivering M&S merchandise on 1 September received off to a rocky begin, with the retailer having to cancel some orders owing to excessive demand.

It additionally briefly halted deliveries to workers members to assist clear an order backlog.

However, on Tuesday, the grocery store defined that due to pleasure over the partnership, the launch day had been its largest ahead order day to this point. Average shopper baskets have additionally elevated by about 5 gadgets because it started providing M&S items.

The agency, which booked a pre-tax lack of £214.5m in 2019, mentioned it anticipated sturdy underlying earnings of £40m this yr due to continued demand.

Melanie Smith, Ocado Retail’s chief govt, mentioned: “Our aim is to continue to set the bar as we begin again to welcome new customers who are seeing the benefits of online shopping in ever greater numbers and we remain focused and on track to increase capacity by 40% through to 2021.”

M&S enhance?

Analysts mentioned the outcomes weren’t solely promising for Ocado, but additionally for M&S, which purchased a 50% stake within the Ocado Retail enterprise for £750m final yr.

Some warned the enterprise had overpaid at a time when its enterprise was struggling.

Sophie Lund-Yates, an fairness analyst at Hargreaves Lansdown, mentioned: “This could bode well for Marks & Spencer, whose sales could do with a boost, and who staked a lot on this deal paying off.

“98% of shoppers are already procuring at M&S, although, so it is going to be fascinating to see what number of of those gross sales could have merely transferred from shops.”

Ocado has said the recent shift to online shopping could mean a “everlasting redrawing” of the retail landscape.

“The world as we all know it has modified,” chief executive Tim Steiner said in July.

“As a results of Covid-19, now we have seen years of development within the on-line grocery market condensed right into a matter of months; and we cannot be going again.”