Ocado plots acquisition drive

Ocado is plotting a major acquisition campaign to highlight its points of difference as it looks to arrest declines in its share of the grocery delivery market.

ocado

The online grocer has appointed BD Network to develop a major digital, print, outdoor and direct mail campaign to raise awareness of the quality and service it offers such as convenient booking slots, its online-only models and exclusive lines.

Ocado will be hoping that the “ambitious” campaign activity will help grow its customer base and turnaround its recent sluggish performance.

Its shares fell sharply earlier this year when it reported flat profit before tax at £0.2m for the half year to 13 May, despite an 11% rise in sales to £308m.

Analysts have warned that Ocado’s current debt and falling market share makes the business “unsustainable”. Panmure Gordon’s Philip Dorgan said earlier this week that “we are at the beginning of the end game for Ocado”.

CEO Tim Steiner recently said that Ocado would embark on a major push on lowering prices over the next year to drive growth by showing consumers it is not more expensive than its rivals. A “lower price promise” has been trialled in Manchester and will be rolled out nationally.

It is not known if the campaign activity, due to launch this autumn, will take this direction and focus on price messaging.

Ahead of the autumn campaign Ocado is this week launching an online filmmaking competition inviting people to create a short film on the theme “my worst supermarket shopping experience”.

The online supermarket could also use the content in future marketing activity.

The winner of the competition, which runs until the end of September, will receive a year’s worth of free Ocado shopping.

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