More

    Ocado’s ‘perfect execution programme’ delivers improved growth 

    Photo: iStock

    Ocado has returned to positive EBITDA and retail revenue growth in FY2023, signalling that after one year the ‘Perfect Execution Programme’ has paid off for the struggling online grocer. Ocado Retail has finished FY2023 on firm footing, posting a 10.9 per cent growth in retail revenue for Q4 (13 weeks to 26 November 2023) and a 7.0 per cent like-for-life (l-f-l) full year retail revenue growth.

    Q4 average orders per week improved 4.0 per cent owing to successful marketing and price matching strategies on 10,000 items against Tesco, which has aided in improving active customer numbers +5.9 per cent to over one million, securing an established customer base for the year ahead.

    Following today’s release of Ocado’s figures for the 13 weeks ending 26 November 2023, Eleanor Simpson-Gould, Senior Retail Analyst at GlobalData, states, “Though Ocado has posted a positive step forward in momentum across key KPI’ s, average basket size lags, for FY2023 the number of basket items reduced 4.5 per cent year-on-year (y-o-y) as the cost-of-living crisis forced customers to economise. For FY2024, Ocado’s strategy focus on OTIF (on-time-in-full) deliveries, range and value must home in on recovering growth in average basket sizes.

    “With projected growth in shoppers seeking better value, quality and choice as inflation pressures diminish in 2024, Ocado is on the front foot announcing a further expansion of 1,700 price cuts in January to improve volume growth.

    “Despite 2023 being a year plagued by record high food inflation rates and a dramatic shift in customers trading down both in price and retailer, Ocado has weathered the storm. Q4’s retail revenue growth of 10.9 per cent is a drastic improvement, albeit against a very low comparative in Q4 FY2022 (+0.3 per cent), exceeding UK food & grocery sector growth of 7.9 per cent for Q4, however Ocado’s Q4 sales have been outpaced by Tesco’s online sales (+11.5 per cent for the 19 weeks ending 6 January 2024).

    “Undoubtedly, Ocado’s winning partnership with Marks & Spencer, has been a critical element in Ocado’s year of growth bolstering the online grocer’s extensive range portfolio. However, it is Ocado’s return to positive EBITDA growth which is the shining light in this latest result announcement. Following capital investments in new fulfilment capabilities, including moving operations from its original Hatfield to improved Luton site has awarded the online grocer flexibility to drive down fixed costs and improving order fulfilment, during a year of unprecedented overhead cost concerns for retailers.

    “The ‘Perfect Execution Programme’ must achieve another year of strong growth to prove the successes achieved in FY2023 are durable and long-standing operating improvements to further improve Ocado’s profitability. With online sales improving at Tesco, value, customer satisfaction and range are key battlegrounds in which Ocado must remain agile.”

    Latest

    A chip off the old block

    Kersheaup Vagadia leads the way for a next generation...

    What are the new post-Brexit border controls starting on 30 April?

    On 30 April, the second phase of Britain's new...

    New Brexit border checks could stifle fine food imports from EU, warn sellers

    Panzer's delicatessen in north west London has lost 37...

    Bira launches podcast for independent retailers

    The British Independent Retailers Association is giving independent businesses across the...

    Don't miss

    A chip off the old block

    Kersheaup Vagadia leads the way for a next generation...

    What are the new post-Brexit border controls starting on 30 April?

    On 30 April, the second phase of Britain's new...

    New Brexit border checks could stifle fine food imports from EU, warn sellers

    Panzer's delicatessen in north west London has lost 37...

    Bira launches podcast for independent retailers

    The British Independent Retailers Association is giving independent businesses across the...

    Shipping container full of illegal vapes can’t be disposed of

    By Natalia Forero, Local Democracy Reporter A shipping container full...

    What are the new post-Brexit border controls starting on 30 April?

    On 30 April, the second phase of Britain's new post-Brexit border controls for food imports from the European Union will begin - three years...

    New Brexit border checks could stifle fine food imports from EU, warn sellers

    Panzer's delicatessen in north west London has lost 37 suppliers from the European Union since Britain left the bloc's single market in 2021, and...

    Bira launches podcast for independent retailers

    The British Independent Retailers Association is giving independent businesses across the UK a powerful new resource with the launch of its "High Street Matters" podcast.Hosted by...