// Ocado posts a loss before tax of £501 million for 2022, while retail sales slip 3.8% to £2.2 billion
// Retail revenue fell by 3.8% to £2.2bn in what the firm called a “challenging market”
Ocado Group posted wider losses after annual results today as the cost of living crisis and return to normal shopping habits post-pandemic hammered its joint venture with Marks & Spencer.
The grocery and technology business saw a pre-tax loss of £501 million, up from £177 million the year before and worse than analyst forecasts of a £399m loss.
Retail sales fell 3.8% to £2.2bn in what the group called a “challenging market” as the benefits of the trend towards online shopping sparked by Covid pandemic lockdowns wound down and customers bought fewer items “exacerbated by the cost-of-living crisis”.
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Ocado Group chief executive Tim Steiner said: “Over the last year every company has had its business model tested by a combination of macro-economic and geopolitical headwinds.
“Ocado Retail, our UK JV with M&S, has shown its resilience against a backdrop of higher costs and smaller baskets, reflecting the Covid unwind and the UK cost of living crisis, by growing customer numbers and increasing online market share.
“As the Covid unwind fades and customer growth continues the business will start to recover the fixed costs of recent capacity commitments.”
Gowling WLG retail partner Jocelyn Paulley said: “As Ocado has been experiencing difficulties since the end of the pandemic when demand for its delivery service dropped and investors will be wary of a challenging period ahead as shoppers tighten their belts amidst economic uncertainty and increased energy costs eat into the company’s margins.
“However, the food retailer is actively seeking to be a technology partner for other supermarket chains internationally, and if it is able to secure a number of contracts in this area, then this is likely to contribute to a turnaround for the business.”
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