The world’s largest online grocer Ocado, has reported its first annual pre-tax profit in its 15 year history. Now the e-tailer will “continue to lead the grocery revolution in the UK and overseas”.
The supermarket chain reported a statutory profit before tax of £7.2m for the year ending November 30 as it moved away from losses.
The firm, which has delivered groceries for Waitrose since it was founded in 2000, launched a separate partnership with Morrisons in January last year, allowing for the online service to be established. Steiner said the deal with Morrisons would pave the way for other collaborations.
Ocado’s first profit comes as it increased gross retail sales by 15.3% year-on-year to £972.4m, and at a time where Britain’s major supermarkets are facing intense competition from discounters Aldi and Lidl.
Ocado Chief Executive Tim Steiner said: “Channel shift towards online grocery shopping continued during the period.
While the broader grocery market was characterised by intense competition with minimal growth in the segment, declining supermarket store sales, competitive price activity and cautious consumer spending, we continued to grow ahead of the online grocery market and significantly ahead of the market overall.
We are well equipped to continue to lead the online grocery revolution, in the UK and overseas, as increasing numbers of customers shift away from traditional forms of retailing. We are confident that we have significant opportunities for growth in sales and shareholder value.”
During the period, Ocado’s online pet store Fetch grew at a “significant pace” and its launch of Morrisons.com was reportedly “particularly encouraging and paves the way for future agreements to commercialise the value of our intellectual property”.
Bryan Roberts, Retail Insights Director at Kantar Retail comments:
The headline of Ocado’s first ever annual profit is, of course, welcome news, as is the fact that the company’s growth is outpacing that of some of its online supermarket competitors and the grocery market overall. Ongoing development of fulfilment capacity will provide plenty of headroom for further expansion of shopper numbers, an expansion that may be facilitated by rivals scaling back on expensive shopper recruitment and retention endeavours. Looking ahead, we await with interest to see if further specialist sites like Fetch and Sizzle will see the light of day and if Ocado’s lucrative tie-up with Morrisons might be replicated overseas - a move that Ocado says is under discussion with potential global partners. For Ocado to flourish in the longer term