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Ocado expands capacity to meet growing demand

Sports Direct and Ocado update investors on their multichannel strategies

Ocado today set out how it was stepping up capacity in its customer fulfilment centres to meet demand both from its own customers and to meet the needs of existing and future retail customers of its technology.

The online grocer and technology company, ranked a Top50 retailer in IRUK Top500 research, is boosting capacity in its Andover centre while preparing its fourth centre, in Erith, London, for a 2018 opening date. Chief executive Tim Steiner said the investment was part of a move to “take advantage of our industry leadership” as “channel shift gathers pace.

“These investments,” he said, “while increasing some costs in the short term, will allow us to meet the rapidly growing demand for our services from UK consumers while allowing us to offer the very latest technology to current and future customers of our Ocado Smart Platform.”

The update came as Ocado released a third quarter trading statement, showing group revenue of £344.5m in the 13 weeks to August 27, 14.3% up on the same time last year. Retail revenue of £312.7m was 13.1% ahead, while average orders grew by 16% to 254,000 – although average order sizes fell by 1.2% to £106.25.

Steiner said: “Our industry-leading technology has continued to set the bar for customer service and satisfaction and we continue to grow sales at a rate significantly in excess of the average for our industry. Recent innovations include Ocado becoming the first UK grocer to offer its customers Amazon’s Alexa voice-activated tool, meaning they can verbally modify their online grocery orders.”

This year has seen Ocado sign a growing number of partnerships to provide online services for third party retailers. Building on its partnership to operate Morrisons.com , the retailer has signed Dobbies Garden Centres, and has a joint venture with magazine Marie Claire to run premium beauty brand Fabled.com. In June it announced its first international client, an unnamed European retailer, for its Ocado Smart Platform technology.

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