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Ocado posts strong trading update despite intense price wars


Ocado has recorded strong results in its latest quarterly trading update, but warned the supermarket price wars was having an effect on its margins.

Group sales for the online supermarket retailer was up by 15.4 per cent to £314 million in the 12 weeks to August 7, while its retail sales increased by 13.6 per cent to £286.4 million compared to £252 million during the same quarter last year.

Meanwhile, average orders per week experienced an uptick of 18.9 per cent to 226,000 compared to 190,000 in the same period in 2015 – making it the best volume performance Ocado has had in more than five years.

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However, the average order size dipped by 3.4 per cent.

Ocado chief executive Tim Steiner said that as the market remained competitive, the company was experiencing “sustained and continuing margin pressure and there is nothing to suggest that this will change in the short term” due to the intense price wars.

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“However, Ocado's combination of choice, competitive pricing, and industry-leading service has contributed to an increase in average orders by nearly 19 per cent, our best volume performance in more than five years,” he said.

“We are confident that our commitment to further improving the customer experience through constant innovation, supported by our world-class proprietary technology, will allow us to continue to grow ahead of the online grocery market, and substantially ahead of the market overall.

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Published on Tuesday 13 September by Elias Jahshan

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