UK Markets close in 1 hr 57 mins

Coronavirus: Ocado shares jump as sales soar 52%

Tom Belger
·Finance and policy reporter
·2-min read
EMBARGOED TO 0001 TUESDAY SEPTEMBER 1 EDITORIAL USE ONLY A fleet of limited-edition Percy Pig delivery vans are unveiled as Ocado marks the arrival of the full M&S Food range to the online supermarket's website from today, September 1st.
Ocado sales are soaring. Photo: PA

Ocado (OCDO.L) shares jumped on Tuesday as it revealed its retail sales had leapt by 52% over the summer, and said customers had reacted “positively” to its new Marks & Spencer (MKS.L) partnership.

Stocks in the fast-growing online grocery firm were up 3.9% in early morning trading in London, and are now up 67.8% on a year ago. M&S shares were also up 4.7%.

The company said in a trading statement its revenues had come in at £587.3m ($755.8m) in the 13 weeks to the end of August, up by more than half on the same period a year earlier.

Average orders per week stood at 345,000, a 9.6% increase year-on-year. It said strong demand, a phased reopening of its website to new customers, and a normalising of shopping patterns were behind the rise.

Ocado began supplying M&S products on its website in the first week of August, as part of a new deal replacing its former partnership with Waitrose. Deliveries began in early September.

READ MORE: Domino's Pizza to hire 5,000 staff as Brits eat more at home

The company said “excitement around the launch” meant the average basket size had increased by around five items since the partnership began. A larger share of the average basket was made up of M&S goods than Waitrose ones before the switch, it added. Ocado recorded its best ever day for forward orders on the day of the launch.

Meanwhile separate figures on Tuesday from data firm Kantar suggested Ocado was the fastest-growing retailer over the past 12 weeks. Its analysis suggests sales rose 41.2% year-on-year.

“The switch over to Marks & Spencer is doing Ocado’s retail business a lot of favours,” said Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown.

But she noted news from the company’s solutions business, which charges retailers to use its automation technology for their own online delivery arms, was “noticeably absent” from the trading statement.