Ocado reports profits 65% up and sales up by 17% as it passes £1bn sales milestone

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Ocado today reported fast growth in sales, profits and customer numbers as it passed the £1bn sales milestone.

Tim Steiner, chief executive, put the growth of the online grocer down to “its clear focus on innovation and customer service.

The company said gross sales of £1.11bn in the year to November 29 were 14.7% higher than the same time last year, while revenue of £1.107bn was up by 16.7%. Pre-tax profits of £11.9m were 65.3% up on last time.

Active customers numbered 509,000 by year-end, 12.4% more than the previous year, while new customer acquisitions were up by more than 20%. The number of orders delivered grew by 16.8% to an average of more than 195,000 a week, but average basket value fell by 2.1% to £109.95 as prices fell and as more customers shopped only on the Fetch or Sizzle niche websites for, respectively, the petfood and cookwares market.

“The continued enhancement of Ocado’s industry-leading technology and investment into our retail proposition over the course of the year has meant our customers now have greater choice, competitive prices and consistently higher order accuracy and on-time delivery,” said Steiner. “As a result, customer numbers grew, reflected in strong revenue growth in a very challenging market environment.”

The company has developed in-house its own fulfilment technology, soon to go live in its Andover customer fulfilment centre (CFC), and has launched the Ocado Smart Platform, for international retailers to use as they move into ecommerce.

Steiner said the smart platform was “proving to be of great interest to a significant number of retailers” and that he expected to sign deals for its use in a number of countries in the medium term.

The technology company and grocer’s partnership with Morrisons , powering its ecommerce service, has now been running for a year, and Ocado said that Morrisons.com sales were now up to around £200m.

At the same time, Ocado has been replatforming its own in-house developed IT systems, a task that it said today remained “in line with our expectations.” A new mobile website for Ocado.com launched in January 2015 which it said enabled mobile shoppers – who accounted for more than half of its total transactions in 2015 – to shop more easily.

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Image courtesy of Made.com
Strategy and Innovation
4 Oct 2022

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