Double digit revenue growth for Ocado - even before effects of the Coronavirus crisis
By James Young | 19th March 2020
Online supermarket Ocado have revealed a double-digit growth in revenue for the first quarter of the financial year, hours after removing their website from use due to increased demand due to coronavirus.
Ocado Retail, a joint venture between Ocado Group plc and Marks and Spencer Group plc released a trading statement to the Stock Exchange this morning for the 13 weeks to March 1.
It showed a growth in retail revenue of 10.3 per cent, broadly in line with previous guidance, to £441.2million.
The average number of orders per week rose by 10.2 per cent with Ocado now supplying 343,000 customers per week.
The statement reflected the extraordinary circumstances since the period due to the coronavirus crisis hitting the UK.
"With customers' concerns over the Coronavirus, since the quarter end, we are seeing higher value baskets with an increase in mix of ambient goods, as well as an increased demand for orders," the company said.
"While this has placed the business under unprecedented strain, we are taking all measures to ensure that our service remains as close to normal as possible and to meet as much of the demand as we can."
Melanie Smith, Ocado Retail's Chief Executive Officer, said: "We have reported continuing growth at Ocado Retail with sales up 10.3% over the quarter.
"The impact of higher basket values and order demand, amid growing public concern over the Coronavirus, was limited in the quarter, although this has since picked up significantly and growth in the second quarter is so far double that of the first quarter.
"We expect the impact of forward buying, however, to unwind at some point.
"However Coronavirus unfolds, what is clear is that the fundamentals at Ocado Retail are strong, illustrated by double digit increases in customer orders, driven by consistent execution, which deliver a best-in-market customer experience.
"Preparations for the M&S switchover from Waitrose, this September, are on track, and we are looking forward to building closer and stronger relationships with our branded suppliers as part of the transition.
"I am tremendously proud of my colleagues and the outcomes we have achieved in the first quarter.
"I am confident that our resilience, teamwork and commitment will stand us in good stead to continue to deliver for our customers even with the current uncertainties.
"I'd also like to take this chance to thank our amazing drivers and warehouse staff who are working tirelessly to deliver groceries to as many people as possible in these uncertain times. Their dedication and hard work is truly amazing."
In an update to their announcement on Wednesday, the firm said." In order to adapt to unprecedented demand and to protect our employees, the business has made some operational changes to ensure that we can deliver the most groceries at this time of need and to provide the best possible service for customers despite the disruptions.
"These included the hard choice of stopping registration for new customers for the time being and closing the App temporarily, while we scale ability to serve the unprecedented use of our customer interfaces.
"Late yesterday, having sold all of our delivery capacity for the coming days, we also took the decision to temporarily close our webshop to enable us to make changes to ensure the distribution of products and delivery slots is as fair as possible for our customers.
"This will not affect existing orders as we will deliver any customer order already booked."
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