More

    Value-led offers lead Ocado back to growth

    Photo: iStock

    Ocado Retail returned to growth in the number of items sold for the first time since the COVID-19 pandemic in the last month of its latest quarter, as it gained more customers who shopped more regularly at the online supermarket.

    The volume growth helped the 50-50 joint venture between Ocado Group and Marks & Spencer report a 7.2 per cent rise in revenue to 570 million pounds in its third quarter to Aug 27, up from 5 per cent growth in the first half.

    Online’s share of Britain’s total grocery market was about 7 per cent before the onset of COVID-19 in 2020. It peaked at about 15 per cent during the coronavirus pandemic, but has since fallen back to about 10 per cent as shoppers returned to stores.

    Ocado Retail CEO Hannah Gibson told reporters the volume growth reflected a 1.5 per cent increase in active customers to 961,000, a 1.9% rise in average orders per week to 381,000 and a stabilisation in average basket size at 44 items.

    Commenting on the figures, Joe Dawson, Retail Analyst at GlobalData, said the focus for CEO Hannah Gibson was on “perfect execution” which was ensuring deliveries were on time and in full and enticing more consumers with value-led propositions.

    “These efforts have paid off, with a 1.5 per cent increase in active customers to 961,000 and a growth of 6.6 per cent in the number of mature customers (customers that have made at least five shops with Ocado) over the period. Price cuts successfully navigated the boundary between increasing volumes and hurting turnover gains, as the average basket value increased 4.2 per cent to £120.7, and average orders per week grew 1.9 per cent to 381,000. However, the slight drop in items per basket from 45 to 44 might suggest consumer budgets still haven’t recovered and some shoppers are also shopping elsewhere a bit more.

    “The retailer announced it would be shutting its Hatfield customer fulfilment centre back in April 2023, and will be opening a new one in Luton in September 2023 which it expects will be twice as productive. This will put Ocado in good stead to capitalise on the increased demand for online groceries over the festive period and combined with the launch of new lines with Marks & Spencer in Autumn, this will be key to boosting sales in calendar Q4 2023. As inflation slows down and consumers recover purchasing power, the grocer must cement itself as the first port of call for new and returning online grocery shoppers by highlighting its high-quality range and convenience.”

    Latest

    PML launches new digital trade platform for IQOS retailers

    Philip Morris Limited (PML) has unveiled Heatwave Open, a digital trade...

    TWC Group is new James Hall & Co. Ltd data partner

    TWC Group has been announced as the new data...

    Rekorderlig unveils new Peach-Raspberry flavour for 2024

    Rekorderlig is expanding its range with the launch of...

    Historic charity, NewstrAid, announces 185th birthday raffle

    Industry charity, NewstrAid, has announced it will be holding...

    Don't miss

    PML launches new digital trade platform for IQOS retailers

    Philip Morris Limited (PML) has unveiled Heatwave Open, a digital trade...

    TWC Group is new James Hall & Co. Ltd data partner

    TWC Group has been announced as the new data...

    Rekorderlig unveils new Peach-Raspberry flavour for 2024

    Rekorderlig is expanding its range with the launch of...

    Historic charity, NewstrAid, announces 185th birthday raffle

    Industry charity, NewstrAid, has announced it will be holding...

    £10,000 worth of illegal vapes, tobacco seized in South Tyneside

    Around £10,000 worth of illegal vapes and tobacco has...

    PML launches new digital trade platform for IQOS retailers

    Philip Morris Limited (PML) has unveiled Heatwave Open, a digital trade engagement platform designed to bolster online support for convenience retailers stocking its heated tobacco device IQOS. The...

    TWC Group is new James Hall & Co. Ltd data partner

    TWC Group has been announced as the new data partner of SPAR North of England wholesaler James Hall & Co. Ltd. Through TWC, suppliers will...

    Historic charity, NewstrAid, announces 185th birthday raffle

    Industry charity, NewstrAid, has announced it will be holding a special 185th birthday raffle as part of its anniversary celebrations this summer. Everyone from the...