Ocado: Marks-linked grocery tech giant cheers bumper online Christmas orders
Ocado Retail, the grocery delivery service owned in a joint venture with Marks and Spencer, said it would return to positive earnings for the full year, as customers fell back in favour with the brand.
In an update to markets, the online supermarket said it was boosted by its highest level of sales over Christmas, selling over 90 per cent of peak slots released by mid-October.
For the full year, revenue was up seven per cent to £2.3bn and average orders were up 6.3 per cent to 407.
Shares were up over five per cent as markets opened.
Hannah Gibson, chief executive of Ocado said: “We are starting the new year with over one million active customers.
“Over the next 12-18 months, we will be embedding the foundations we have laid this year and raising the bar again for online grocery shopping. We have a really strong platform to build on in 2024.”
The supermarket technology business, enjoyed big wins during the pandemic but struggled to keep up momentum after.
Ocado has introduced a barrage of price cuts to compete with grocers amid the cost of living crisis.
Today, the firm said average basket value was up 2.7 per cent, while basket size reduced by 4.5 per cent year on year to 44 items per order, “driven by the unwinding of pandemic shopping behaviours and the cost of living crisis”.
Shares in the firm are down by three-quarters from their peak in early 2021.
Gibson added: “We made significant progress in 2023. We have focused first and foremost on being a great shopkeeper, improving our unbeatable range, great value and unrivalled experience – all underpinned by improved cost efficiencies.
Chris Beckett, head of equity research at Quilter Cheviot, said: “These results also confirm a trend that we saw in other trading updates from the big retailers – post-covid normalisation.
“After a tough 18 months for online deliveries, we are back in the slow growth period that we were in prior to the pandemic. With Ocado taking on extra capacity in the shape of a new warehouse in Luton, it is looking to once again take advantage of this and come back to a solid level of profitability.”