// Shares slip at online supermarket Ocado after it was downgraded to ‘reduce’ from ‘hold’ at HSBC
// The business said soaring energy prices and CO2 prices will weigh on its profitability in the final quarter of the year
Ocado shares sank on Tuesday as the online grocery retailer had its rating downgraded by analysts at HSBC from hold to reduce, which sent its share price down by more than 7%.
Last week the business cut its outlook despite reporting rising sales as the cost-of-living crisis led to shoppers seeking more value online. It warned the UK economy and rising inflation could dent profits at Ocado Retail, its joint venture with Marks & Spencer, despite third quarter sales of edging up 2.7% to £532m, which was well ahead of pre-pandemic levels.
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While the retailer noted high customer numbers, its customer baskets were smaller as they “respond to inflationary pressures”.
Ocado Retail chairman Tim Steiner said the firm remains focused on providing customers “with the best possible value to help them navigate the cost-of-living crisis”.
He said that when consumer spending stablises it expected Ocado Retail to “deliver attractive and accelerating growth in sales and a strong recovery in profitability”.
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