// Ocado sales drop in the two months to April 25
// The online grocer warned that its sales growth will be less than half the rate it had hoped for
Ocado has reported a sales fall of 8% in the two months to 25 April compared with a fall of 5.7% in the previous three months as Brits felt the pressure from the rise in cost-of-living.
The online grocer warned that its sales growth will be less than half the rate it had hoped for as the cost of living crisis and return to office work impacted its trading.
Ocado, which is partly owned by Marks & Spencer, said it now expected sales growth of less than 5% for the year to the end of November, compared with 10% anticipated.
The prediction comes after sales fell as shoppers were buying fewer items than usual.
Ocado said: “The trading environment has deteriorated with the cost of living crisis compounding the impact of a return to more normal consumer behaviours as restrictions have ended and many people return to the office.”
Ocado said that as food retail prices were rising by about 4% or 5%, customers were ordering one or two fewer items each shop than before, so that the value of the average basket was down about 9% compared with a year ago.
It added: “The fundamentals of the business are strong and Ocado Retail is confident that sales and [underlying profit] contribution will follow an increasingly positive trajectory in the medium to long term.”
Steve Rowe, the chief executive of M&S, said the sales fall was a “short-term reversal” and it was “clearly the right thing” for the retailer to have bought a stake in Ocado and to begin selling food online.