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Ocado Q3 sales jump 9.9%

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Online grocer Ocado today reported a 9.9 per cent increase in total sales to £162.6 million for its third quarter despite disruption from the summer’s one-off events.

With the Olympics following the Diamond Jubilee, customer ordering patterns were affected as a result although average orders per week for the 12 weeks to August 5th 2012 jumped 8.6 per cent to 120,494, the e-tailer noted.

Average order size over the period was £112.44, an increase of £1.36 on the same period last year and Ocado pointed out that it has managed to preserve margins by reducing focus on short term vouchering activity, which the retailer said in a statement is “currently prevalent in the market.”

Recently however, Ocado CEO Tim Steiner unveiled plans for a price war, highlighting the launch of the e-tailer’s ‘Low Price Promise’, a trial taking place in the North West which sees the company pledge to beat the price of all comparable shopping baskets at rival Tesco and it has been announced that the offer will be expanded in the coming months.

Over the quarter, Ocado has also grown its range which now offers 30 per cent more products than at the start of the year and includes the expansion of its ‘Free From’ offer.

Ocado’s Hatfield customer fulfilment centre (CFC), which suffered serious capacity problems late last year damaging overall efficiency as a result, is now operating with “improved efficiency” while the upcoming CFC in Dordon Warwickshire is on course to open in the first quarter of 2013.

Commenting on the results, Steiner said that, while the group has improved its prices, ranges and services, it is important to be realistic about the current economic climate.

“The grocery market and the general economic picture remain challenging, with consumer confidence subdued and significant competitive couponing activity.

“Notwithstanding this environment, we have continued to build on the foundations we have put in place to deliver growth and operational improvement through the rest of this year and for the future, and we are targeting an increase in sales growth through the remainder of the period.”

Published on Thursday 20 September by Editorial Assistant

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