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Ocado achieves first half profitability and strikes product deal with Carrefour

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In a long-awaited company first, Ocado has delivered pre-tax profitability in its first half, of £0.2m compared to a loss of £6.7m in the same period last year. As well as revealing encouraging interim results, with net sales up 20.1% to £276.6m in the 24 weeks to May 15, the online grocer says it will begin selling a food range supplied from French giant Carrefour from 14 July this year.

The new supply partnership with Carrefour will take the form of a trial of the ‘Reflets de France’ range of authentic French produce. It will be available to all Ocado customers across the UK. “This new partnership is an important step in Ocado’s strategy to offer the broadest and most diverse grocery range to all our customers,” said a spokesman.”We believe the addition of this authentic and historic French range will complement our existing lines from our partner Waitrose and will be a welcome broadening of our range for our customers.”

Despite recent worries in the City about Ocado’s increasing competition with Waitrose for home delivery customers, chief executive Tim Steiner was bullish about prospects. He said: “Strong customer demand has delivered profitable growth, limited only by our operational capacity. We are therefore focused on increasing capacity to meet demand and improve delivery timetables and order accuracy.”

Upgrades to Ocado’s routing software and vans has led to drops per van per week increasing by 8% to 142 in the period. On-time delivery performance decreased slightly to 92.7% from 94.9%, but this was put down to “the fulfilment centre running at slightly reduced efficiency as we encountered capacity constraints”. Ocado says ongoing investment to increase capacity will drive this back to higher target levels.

A second central fulfillment centre is being built at Dordon, Warwickshire at a cost of £22.3m, and this should become operational at the end of 2012.

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