Pandemic shopping delivers 40% sales boost for Ocado

Ocado, the online grocer, has reported that UK sales soared 40% to £599m in its last quarter (the 13 weeks to 28 February), reflecting “strong demand” for online grocery shopping during the pandemic.

As reported by Retail Week, Ocado chief executive Tim Steiner also dismissed any threat from Amazon Fresh, describing the US retail giant’s grocery delivery service as a “very small competitor” in the UK market, and he also played down competition from on-demand grocery start-ups like Weezy and Zapp.

The details

• The average Ocado order cost £147 in the last quarter, which Ocado attributed to shoppers spending more on home grocery deliveries over the festive period.
• Products from high-end retailer Marks & Spencer accounted for at least 25% of the average basket and average orders per week rose 2.5% to 329,000.
• Melanie Smith, chief executive of Ocado Retail, said large numbers of UK consumers have made a “permanent shift” to online grocery shopping over the past year and she expected the trend to continue with strong growth over the coming years.
• New ‘fulfilment centre’ openings are expected to increase Ocado’s capacity by 40% and the company is also looking to establish at least 12 micro sites, mostly in London, to support the rollout of its one-hour Zoom delivery service.

Key quote

“The large online competitors are Tesco, Sainsbury’s, Asda and Morrisons and then at a smaller rate, Waitrose and Iceland. Amazon Fresh is right, right, right down the list at an almost non-noticeable level. That doesn’t mean that we don’t obviously watch them because Amazon is an extraordinary global retailer. But their impact in the UK grocery market since they arrived has been very, very small” – Tim Steiner, CEO of Ocado.

Sourced from Retail Week