Ocado sales surge amid shift to online shopping

Image copyright
PAUL ELLIS/AFP VIA GETTY IMAGES

Online grocer Ocado saw its sales rocket more than 50% in the third quarter of the year as more customers used it in lockdown.

Sales at Ocado Retail, its joint venture with Marks & Spencer, and previously Waitrose, were £587.3m in the 13 weeks to 30 August.

The firm said growth was stronger than in the second quarter, while weekly orders stood at 345,000, up almost 10%.

It comes as more people shop online because of the pandemic.

The firm’s switch to delivering M&S products on 1 September got off to a rocky start, with the retailer having to cancel some orders owing to high demand.

It also temporarily halted deliveries to staff members to help clear an order backlog.

However, on Tuesday, the grocer explained that because of excitement over the partnership, the launch day had been its biggest forward order day to date. Average shopper baskets have also increased by about five items since it began offering M&S goods..

The firm, which booked a pre-tax loss of £214.5m in 2019, said it expected strong underlying earnings of £40m this year because of continued demand.

Melanie Smith, Ocado Retail’s chief executive, said: “Our aim is to continue to set the bar as we begin again to welcome new customers who are seeing the benefits of online shopping in ever greater numbers and we remain focused and on track to increase capacity by 40% through to 2021.”

Ocado has said the recent shift to online shopping could mean a “permanent redrawing” of the retail landscape.

The world as we know it has changed,” chief executive Tim Steiner said in July.

“As a result of Covid-19, we have seen years of growth in the online grocery market condensed into a matter of months; and we won’t be going back.”