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Ocado offers loyal customers discounts

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Online grocer Ocado is offering more discounts to loyal customers as it looks to keep sales growing in an increasingly competitive market.

The company, which today announced sales growth of 19.5% in its financial year to date, the 36 weeks to August 7, also unveiled the Ocado Savings Pass. Customers pay a small annual fee in exchange for discounts of 10% or more on standard Ocado retail prices across a range of more than 500 products.

The measure follows the introduction of the Ocado Delivery Pass, which is now used on more than half of all orders. Subscribers to the pass receive free delivery. Average orders for Delivery Pass users fell by 0.2% in the third quarter, and by 0.1% for those not signed up to the pass.

The company said it was also important to keep customer service levels high. It recognised service levels had fallen off in the first half of the year, but said recent investment in this area had seen them improved, with 99% of deliveries now correct and 95.5% on time or early.

In its third quarter interim management statement, for the 12 weeks to August 7, the company said gross sales had risen by 16.9% to £147.9m. In the year to date, the 36 weeks to August 7, they were up by 19.5% to £444.6m..

Shoppers placed more orders, at an average of 110,945 made each week in the 12 weeks to August 7, compared to 92,834 at the same time last year. But they spent less each time, with average order values falling to £111.08 in the period from £113.59 last year.

Ocado also said work to expand its main fulfillment centre was on target to handle 140,000 orders a week by the end of the fourth quarter, while work to build a second centre in Warwickshire was on time and to budget.

Tim Steiner, Ocado chief executive, said: "In spite of the tough economic environment, our sales are growing substantially and we remain focused on improving range, value and service for our customers. We are continuing to expand the capacity of our first fulfilment centre in Hatfield, with significant progress made over the summer months. While conducting these works, we have invested additional resources in improving our key customer performance metrics and we are pleased that these efforts are paying off."

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