Friday, December 13, 2019

Ocado confirms beginning of the end for grocery price war

Ocado shares

Online grocer Ocado has reported a boost in sales for its first quarter while confirming the grocery price war is beginning to wind down.

Gross sales for the 13 weeks to February 26 rose by 13.1 per cent year-on-year, alongside a 16.7 per cent growth in orders per week to 252,000.

Average order size also fell at a slower rate than usual, dropping by 1.6 per cent to £110.84, reportedly due to a reduction in multi-buy promotions.

Meanwhile, the retailer has stated that rising inflation due to the struggling pound has initiated a slowdown in the intense price war between the UK‘s leading grocers.

“While the market remains very competitive, there are the first signs of a change in market pricing dynamics coming through,” Ocado chief executive Tim Steiner said.

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“However, it remains too early to predict how this will unfold throughout the year, and in particular is dependent on any future currency movements.”

Following the announcement, Ocado’s chief financial officer Duncan Tatton-Brown added: “We are a profitable business, we are growing faster than anybody else and we are becoming more efficient, so we don‘t mind the competition, which is why we continue to follow market prices.

“The quality of our service is very good. We could probably get away with being more expensive, but it‘s not what we try to do, we try to follow the market.”

This follows recent news that supermarket inflation had doubled throughout February, jumping to a near three-year high of 1.4 per cent in the 12 weeks to February 26, compared to 0.7 per cent in the 12 weeks to January 29.

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