- Average orders per week up 3.6% in first quarter
- Active customer numbers up 13.8% on last year
- Current-year guidance remains unchanged
Shares in online grocery specialist Ocado (OCDO) reversed their early gains, dropping more than 5% to 426p, despite attracting nearly 14% more customers in the 13 weeks to 26 February than in the same period a year earlier.
Ocado Retail, the joint venture operated equally with Marks & Spencer (MKS), reported a 3.4% rise in retail revenue to £584 million in the first quarter of 2023, with average orders per week of 381,000, up 3.6% year-on-year.
There was a 13.8% increase in active customers, which reached 951,000 at the end of the first quarter, helped by ‘improved service levels, with on time delivery and order accuracy.’
Ocado Retail chief executive Hannah Gibson said: ‘We continue to attract more and more customers to Ocado by investing in great value for customers including our new Ocado Price Promise and providing unbeatable choice and service.
‘While the trading environment remains challenging, we expect to build momentum through the second half of the year, as we improve our proposition, grow our customer base, and no longer lap Covid shopping behaviours. This solid 2023 performance will enable us to return to sales growth and profitability.’
Russell Pointon, director of consumer research at Edison, was upbeat about Ocado Retail’s latest first-quarter results which he found ‘reassuring’ as the group ‘continues to focus on investing in their customers and providing top-notch group choice and service.’
The only negative point Pointon noted in the report was the average basket size, which declined by over 8% as customers ‘continue to order fewer items to counter the ravages of inflation.’
FOOD INFLATION AT ALL TIME HIGH
Despite the upbeat news from Ocado Retail, there was more misery for food shoppers according to the latest Kantar supermarket data.
Grocery price inflation rose again in the last month to a record 17.5%, adding £837 to the average household’s annual bill.
The rise in prices of basic items like eggs, milk and cheese are causing consumers to ‘shop around’ and visit three or more of the top 10 retailers, meaning footfall was up in every single grocer this month according to Kantar.
Lidl was the fastest-growing supermarket while Aldi reached a new high in terms of market share. Morrisons returned to growth, and Waitrose had its best performance since September 2021.
Disclaimer: The author (Sabuhi Gard) owns shares in Ocado.
