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Ocado sales up 10% as Hatfield operations improve

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Online grocer Ocado has today revealed a 10.9 per cent increase in gross sales year-on-year for its first quarter period.

An interim management statement shows sales totalled £162.1 million for the 12 weeks to February 19th 2012, with average orders growing during the period but average order sizes slightly dropping compared to last year.

During the second half of 2011 the e-tailer saw efficiency knocked by serious operational issues at its main customer fulfilment centre (CFC) in Hatfield, but CEO Tim Steiner claims that these problems have now been “largely overcome”.

Improvements to Hatfield mean that the centre is now operating at record levels, with the busiest week in Q1 delivering 134,000 orders, compared to the a peak of 124,000 in one week during the same period last year.

“We have continued to work hard on developing the offer for our customers,” Steiner said.

“Specific focus has been placed on price and range initiatives, including growing our own label and non-food offers, as well as the continued roll out of our Saving Pass scheme, supporting our objective of offering our customers the widest range at highly competitive prices.

“Despite the continuing economic headwinds in the UK, more and more consumers are seeing the benefits of online grocery shopping, and in particular, the service that we offer.”

Ocado increased its product range to 21,000 SKUs in the quarter, and operational performance in both of its key measurements saw slight improvements; 93.2 per cent of all orders arrived either early or on time; 98.2 per cent of products were delivered as ordered.

Average orders per week for the 12 weeks increased by 13.4 per cent to 116,987 from 103,207 for the equivalent period in 2011, but average order size dropped from £118.06 last year to just £115.49 due to consumers cutting down on non-essential spending.

Testing & commissioning for the group’s second CFC, currently under construction, will begin in the middle of this year with the site on schedule to begin operations during the first quarter of next year.

Steiner added: “Evidence suggests we have largely overcome the operational challenges we faced in expanding our Hatfield capacity in the second half of 2011, and are set to meet growing demand through the rest of the year. We expect to see acceleration in sales growth as the year progresses.”

Published on Monday 05 March by Editorial Assistant

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