Ocado sales leap 40% amid ‘dramatic and permanent’ online shopping shift

Ocado has revealed a 40% surge in retail sales amid a “dramatic and permanent” shift towards online shopping since the pandemic struck.

The group said its retail arm joint venture with Marks & Spencer delivered retail revenues of £599 million for the 13 weeks to February 28, covering the Christmas trading season – up 39.7% on a year earlier.

The value of its average order jumped from £110 a year earlier before the pandemic struck to £147, which it put down to a festive boost combined with the impact of the latest lockdown.

Ocado processed 329,000 orders a week, up 2.5% on a year earlier.

Tim Steiner, chief executive of Ocado Group, said: “Over the last 12 months, there has been a dramatic and permanent shift towards online grocery shopping around the world.

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“Millions of customers have experienced online grocery shopping through the pandemic and many of them will not be going back to bricks and mortar.”

He said even if there was some drop-off in online grocery shopping as UK restrictions ease, Ocado is set for further growth as there are “effectively customers queueing to come on to the Ocado site”.

The group said sales and earnings growth is set to ease as it comes up against strong results from a year ago, when the coronavirus crisis hit.

But it expects revenue growth in the second quarter amid ongoing Covid-19 restrictions and as it ramps up production at its new mini hi-tech warehouse in Bristol, which can process 30,000 orders a week.

Melanie Smith, Ocado Retail’s chief executive, said: “The second quarter represents the one-year anniversary of the start of the Covid-19 pandemic which accelerated the demand for online grocery.

“While this year’s quarterly sales figures will reflect the year-on-year comparisons with periods of full lockdown, we expect strong growth over the coming years as we continue to lead the charge in changing the UK grocery landscape, for good.”

The firm also revealed it is on the hunt for at least 12 new micro sites largely across London to further the rollout of its Ocado Zoom service, which offers one-hour deliveries.

It is also “actively looking” for suitable sites to grow outside the capital.

Mr Steiner dismissed the recent launch of Amazon Fresh in the UK’s bricks and mortar grocery market as having a “negligible impact”.

Amazon Fresh opened its second UK till-free grocery store in Wembley Park earlier this week, with plans to open more grocery stores in the capital throughout the year.

“They’d have to roll out an awful lot of stores to have an impact on anyone’s business,” Mr Steiner added.

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