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Ocado sees rise in Q1 sales and new customers but basket sizes reduce

Image courtesy of Ocado Retail/M&S

Ocado Retail has said it’s winning new customers by offering value, choice and service as it today reports sales were up by more than 3% in the first quarter of its financial year.

While customer and order numbers both rose, the average shoppers bought fewer items in each shop and spent only slightly more than a year earlier, reflecting the effects of inflation on grocery prices.

The online grocer, jointly owned by Ocado Group and M&S, revealed sales of £584m in the 13 weeks to February 26 2023 were 3.4% higher than a year earlier. Active customer numbers rose still faster, by 13.8% on last year to £951,000, and average weekly orders rose by 3.6% to £381,000.

Average basket values rose only marginally, by 0.2% to £124, reflecting an 8.3% rise in average selling prices to £2.75 from £2.54 a year earlier – while shoppers bought fewer items than they did a year earlier. Basket sizes reduced by 7.5% to 45 items, from 49 last time.

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“We continue to attract more and more customers to Ocado, by investing in great value for customers including our new Ocado Price Promise and proving unbeatable choice and service,” Ocado Retail CEO Hannah Gibson said.

“This means more perfect orders that are on time and in full, with deliveries back to the kitchen table. We are also championing smaller suppliers and creating more of the M&S magic for customers by offering more of the products they love.”

She added: “While the train environment remains challenging, we expect tot build momentum through the second half of the year as we improve our proposition, grow our customer base, and no longer lap Covid shopping behaviours. This solid 2023 performance will enable us to return to sales growth and profitability.”

The retailer continues to predict that sales will grow by mid-single digits this year as volumes increase. It also expects profitability as measured by EBITDA (earnings before interest, tax and one-off costs) to be negative in the first half of the year and positive in the second as the retailer uses more of its capacity – thereby cutting costs in relation to sales.

Commenting, Russell Pointon, director at Edison Group, stated that Ocado sales grew faster in the first quarter than any period in its last financial year.

He said: “This is a reassuring set of results for Ocado. The group, which is a joint venture between Ocado Group plc and Marks & Spencer Group, continues to focus on investing in their customers and providing top-notch group choice and service.”

Ocado is ranked Top350 in RXUK Top500 research, while M&S is ranked Leading. 

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