Ocado sales rise as ‘big price drop’ campaign and joint venture with M&S bear fruit
- Ocado has reported higher sales amid its price reduction campaign this summer
- Shares rose Tuesday morning and are up 26% so far this year.
Ocado has reported a rebound in sales as price cuts tempted shoppers to return during the summer months.
The online grocer said sales grew 7.2 percent to £569.9 million in the third quarter, with a return to positive volume growth in August in its retail business, which operates as a company jointly with M&S.
The rebound in sales coincided with the launch of Ocado’s “big price drop” campaign ahead of back-to-school.
Bearing fruit: Ocado retail sales surged over summer months amid price-cutting campaign
Prices rose 8.4 per cent on average during the third quarter, but Ocado said they still remained “considerably” below overall grocery inflation.
Shares in Ocado They rose 3.2 per cent on Tuesday morning to 812.2 pence, having gained 26 per cent so far this year.
Average orders per week grew 1.9 percent year-on-year to 381,000, while active customers grew 1.5 percent to 961,000.
The average basket value increased 4.2 per cent on the same period last year, to £120.72 and an average of 44 items.
Hannah Gibson, chief executive of Ocado Retail, said: “It’s been a year since I joined Ocado and in January we set out our ‘perfect execution’ strategy, ensuring every element of our customer proposition and operating model is in place. its maximum expression. better.
“We are delivering on this plan and have strong momentum in the business, with revenue growing faster in the third quarter than in the first half and a return to positive volume growth in the final month of the quarter.”
Ocado reiterated its guidance that it would make a profit for the full year, with underlying profits “marginally positive”.
Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, said: ‘A tentative return to volume growth suggests consumers are showing resilience.
‘Ocado is not the cheapest offer out there, despite large investments to lower prices.
‘This demonstrates the power of getting the proposition right, which has included resolving concerns about the placement and promotion of M&S products.
‘This upper end of the market is more insulated from economic problems, but certainly not immune.
‘The fact that price increases of around 8 per cent are so below the rate of grocery inflation, and the difficult volume trends of recent times, show that Ocado customers are only willing to endure a certain degree of price increases.
“Starting near the top of the price spectrum leaves much less room for maneuver.”