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Ocado posts double-digit sales growth

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Ocado today reported double-digit sales growth in the first quarter of its financial year. The online grocer said in an interim management statement that gross sales rose by 10.9% to £162.1m in the 12 weeks to February 19, up from £146.2m at the same time last year.

Ocado said the growth had come as more people bought their food shops online, with the average number of sales rising by 13.4% to 116,987 a week, but falling slightly in value, to £115.49 from £118.06 in the same period last year.

Tim Steiner, Ocado’s chief executive, said he expected sales to continue to grow through the rest of the year, supported by its Hatfield customer fulfillment centre which Ocado says is now operating at record capacity. In its peak first quarter week, 134,000 orders were delivered, compared to a peak of 124,000 in 2011, and Ocado says further improvements will improve capacity, efficiency and customer service performance.

“Despite the continuing economic headwinds in the UK, more and more consumers are seeing the benefits of online grocery shopping, and in particular, the service that we offer,” said Steiner. “Evidence suggests we have largely overcome the operational challenges we faced in expanding our Hatfield capacity in the second half of 2011, and are set to meet growing demand through the rest of the year. We expect to see acceleration in sales growth as the year progresses."

The company also reported improving performance, with 93.2% of orders delivered on time or early, while 98.2% of items were delivered as ordered. At the same time Ocado’s range is growing towards 21,000 SKUs (stock-keeping units). The project to build a second customer fulfillment centre was on course, with opening scheduled for the first quarter of next year. In the meantime, its distribution network had been expanded with the addition of a new spoke in Oxford.

“We have continued to work hard on developing the offer for our customers,” said Steiner. “Specific focus has been placed on price and range initiatives, including growing our own label and non-food offers, as well as the continued roll out of our Saving Pass scheme, supporting our objective of offering our customers the widest range at highly competitive prices.”

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