Ocado grabs share in competitive online retail sector

A flurry of orders in the week before Christmas led to a spike in Ocado’s sales performance over the festive period helping it steal share in the highly competitive online grocery market.

ocado
Ocado’s sales grew 21.3 per cent over the festive period.

Sales in the six weeks to 5 January grew 21.3 per cent to £111.1m, which Ocado says reflected extra capacity and strong trading in the run up to Christmas. Average order size rose 0.8 per cent to £111.60 in the period.

Tim Steiner, Ocado chief executive officer, says: “We are please with the progress in our underlying trading reflecting the further improvements to our proposition to customers and consumers’ increasing desire to shop online for their groceries.”

Neil Saunders, managing director of retail analysts Conlumino, says with online playing a bigger role than ever this Christmas – as demonstrated the latest IMRG and Capgemni online retail figures, with sales growth in December up 18 per cent year on year – it would have been disappointing if Ocado had reported anything but strong sales.

However, given that its 21.3 per cent sales growth rate is above that of the overall online grocery market across the period, “credit should be given to [Ocado] for grabbing share of what remains a very competitive sector”, he says.

Saunders adds: “With its strong technology platform, intuitive apps and website, and strong performance in areas like substitutions, Ocado delivers on [propostion]. So long as it keeps delivering and stays ahead of the curve, it should be capable of growing its customer base much further.”

Ocado’s strong platform proposition was one of the reasons Morrisons partnered with Ocado to provide IT and delivery service for the former’s online grocery launch. Morrisons.com went live on 20 December, with the first deliveries made on10 January. 

Steiner says: “We are pleased to have enabled the launch of Morrisons.com on schedule and as planned. This has been possible due to the strength of our best in class technology platform, the efforts of the teams involved at Ocado and the continuing strong collaboration with Morrisons.”

In spite of the robust sales performance, Steiner said the retail environment remains “both challenging and competitive, with consumer sentiment subdued” but that the company expects to continue growing broad line in line with, or slightly ahead of, the market.

Elsewhere today (16 January), Argos owner Home Retail Group and Currys and PC World owner Dixons Retail both credited ecommerce for fuelling their sales growth over the festive period. 

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