Yahoo Finance Ocado blames driver shortage for sales slowdown
A shortage of drivers has hit sales at the online grocer Ocado, which said the problem was affecting the rest of the retail industry.
The boom in online shopping has driven up demand for drivers. According to the recruitment company Manpower, some firms are offering bonuses and paying premiums of up to 20% on their standard rates to attract workers. Lorry drivers can earn more than £20 an hour as well as bonuses of £100 per shift.
Ocado said it had found it difficult to recruit enough drivers in certain parts of London and south-east England, and had had to offer higher wage rates.
Its chief executive, Tim Steiner, said: “A shortage of capacity, with the lack of drivers in certain locations being the largest factor, restricted our sales growth.
“While this driver shortage has now been largely resolved, there was some short-term impact on average orders per week over the period.”
Retail revenues at the online grocer rose 11.6% to £374m in the 14 weeks to 3 December, its fourth quarter, down from 13.1% in the previous three months. Growth in average orders per week slowed to 11.1%, to 280,000, while the average order size edged up 0.3% to £106.11.
Ocado’s chief financial officer, Duncan Tatton-Brown, said without the driver shortage the sales increase would have been closer to 13%.
“I don’t think this is a unique problem [to Ocado],” he told Reuters. “It’s pretty clear that employment levels in London and the south east … are pretty high and there’s a lot of growth in e-commerce and delivery generally.”
Ocado employs about 12,000 people, half of them drivers.
Ocado shares, which have had a rollercoaster ride since floating at 180p in 2010, edged up 0.4% to 342.8p in morning trade on Thursday.
