Ocado joint venture with Marks & Spencer ‘working well’
Ocado has said its joint venture with Marks & Spencer is “working well,” as the retail delivery giant said revenue growth slowed slightly in its latest quarter.
The firm saw growth in weekly orders, but stable average order size for the 13 weeks to 1 December.
Read more: Ocado sales growth accelerates after Andover fire recovery
Retail revenue rose 10.8 per cent to £429.1m. That was in line with company guidance but down from third quarter growth of 11.4 per cent.
Average orders per week rose 10.4 per cent to 350,000, while average order size was flat at 104.9 pounds.
The deal with Marks & Spencer, completed in August, signalled the end of Ocado’s supply contract with upmarket supermarket chain Waitrose in September 2020 and the start of M&S’ first grocery home delivery service.
Earlier this week, the firm said its Andover warehouse that was destroyed by fire is set to be rebuilt.
The distribution centre burned for four days in February – and more than 300 firefighters fought the blaze at its height.
The new warehouse will be built at the same site, and will be similar in size. It will be fitted with three sprinkler tanks – one more than its predecessor.
Melanie Smith, Ocado Retail’s Chief Executive Officer, said: “I am pleased to report further progress in bringing the Ocado offer to an ever increasing number of customers in the UK. Another strong quarter for customer orders means that we remain the fastest growing grocer in the country. The collaboration between M&S and Ocado Group is working well.
“We have made good progress preparing for switchover date in September 2020, when the M&S food range will be available online for the first time.
Read more: Firefighters put out blaze at another Ocado warehouse
“We are also planning fresh capacity, to offer customers more availability, and have new customer fulfilment facilities in Bristol and Purfleet, and a rebuilt state of the art facility at Andover, on the way. As a team, we could not be more excited”.
Shares rose 0.9 per cent this morning.
Steve Miley, a senior market analyst at www.asktraders.com, said: “These are a solid set of results and show that the company is performing well ahead of the switchover to M&S products in September 2020.
“Ocado is under the spotlight ahead of the switchover and today’s numbers have served to calm investors amid unjustified concerns over the link up.”