Ocado points to fresh growth as revenues surge
ONLINE supermarket Ocado yesterday announced an acceleration in sales growth for the second quarter, raising hopes that the firm has overcome last year’s distribution problems that damaged consumer confidence.
Shares in the company, whose range includes products supplied by upmarket grocer Waitrose, rose 6.8 per cent after it said sales in the quarter to 13 May were likely to be 13 per cent higher than the same period last year.
This compares with 10.9 per cent growth in the first quarter.
“Operational performance at our Hatfield customer fulfilment centre continues to improve and is now operating at record levels of capacity,” the firm said in a statement.
“A number of new enhancements have gone live which will enable us to continue to expand our capacity, significantly extend our range, and improve our operational efficiency.”
Ocado also confirmed its second fulfilment centre in Warwickshire is on track to open in early 2013.
But Philip Gordon, an analyst at Panmure Gordon, retains doubts about the long-term viability of Ocado in the face of strong challenges from rivals – who include Ocado’s key supplier Waitrose.
“Ocado is still losing market share online. With the competitive environment likely to get tougher, we think that it will struggle to demonstrate operational leverage…its competitors have sharpened up their act,” he said.
Ocado has yet to turn a year-end pre-tax profit since it was founded in 2001 and its shares have slumped from a 2010 IPO price of 180p.