Tesco and Ocado report lifts in online sales

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Tesco said its online sales showed double digit growth over the Christmas period – but promised to improve the shopping experience for its customers in response to “disappointing” UK sales.

Customers increased their internet spend, on both food and non-food items, by more than 14% in the six weeks to January 12, the company said today in a Christmas and New Year trading statement.

The supermarket’s non-food operation, Tesco Direct, reported close to 1m orders during the period. Of those, more than two-thirds were collected in store using the supermarket’s click and collect services.

But the positive online figures came against a backdrop of falling like-for-like sales across the group’s UK operations. While total sales grew by 1.7% excluding petrol, like-for-like figures, which strip out the effect of store openings and closures, were down by 1.3%. This, said chief executive Philip Clarke, was “disappointing.”

Clarke said the company would be building on its work of addressing “long-standing business issues.” He said: “The Big Price Drop is an important first element in this process but there is much more we can do to further improve our shopping trip for customers and we are determined to move faster.” He promised more details when full-year results are announced in April.

International growth was strong, however, coming in at 8.2% over the period and pushing total group sales up by 4.0%, excluding petrol, to “record” levels.

Meanwhile, online grocery business Ocado said its gross sales rose to £18.7m, in the seven days to Christmas, a 23.8% improvement on the same time last year.

Over the four weeks running up to December 25, customer orders rose by 21.8% in number, to 450,708, and by 16% in value to £59.0m.

Giving figures for the fourth quarter, the 16 weeks to November 27, Ocado reported a 10.8% rise in sales to £198.2m, while average orderse were up by 13.5% to 113,200. However, average order sizes fell back to £109.40, from £112.10 at the same time last year.

Ocado, which has primarily sold Waitrose label groceries, gave insights into its progress in diversifying its range at a time when the supermarket is now making its own deliveries. Its own label sales were up by more than 88% in the four weeks to December 25, while sales of third party brands were also doing well. Daylesford Organic sales, for example, rose by 150% in the period.

Andrew Bracey, chief financial officer of Ocado, said: “This was encouraging trading for December as a whole and particularly the seven days to Christmas, with sales growth of 23.8%. This was accompanied by good operational performance throughout the trading period.”

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