Ocado sales rise 30%

Ocado has reported a near 30% rise in sales, though investor confidence in the recently floated online grocery retailer remains low.

Read The Secret Marketer’s column on why there is long term value in Ocado

Ocado

Gross sales hit £372.2m in the 36 weeks to 8 August 2010, compared to £286.8m for the same period last year.

Average orders were also up in the 12 weeks to 8 August by almost 22,000 per week. However, average basket size decreased slightly from £114.73 in 2009 to £113.59.

The retailer says the strong growth has been helped by an increase in the proportion of sales through mobile channels such as the iPhone and Android devices. Ocado is currently developing its digital strategy through social media and search marketing but is yet to appoint a digital agency to handle its account.

Andrew Bracey, Ocado chief financial officer says “operationally this was another strong quarter for us”.

However, the retailer has its critics, who point to it having never made a pre-tax profit and its over-reliance on Waitrose, with which it is has a deal until September 2020.

Much was made of Ocado’s flotation in July, when shares were issued at a reduced 180p each. They have kept falling, and even in the wake of today’s sales figures dropped 5.25p to 151.75p.

However, our Secret Marketer columnist has put up a robust defence, suggesting the true long term value of Ocado will come from its “close affinity to its target customer and how well it is able to understand and market to them”.

Ocado is facing intensified competition from other mainstream supermarkets expanding online operations and offers.

Morrisons is the only one of the “Big Four” supermarkets that doesn’t currently offer an online grocery channel, though this is expected to change when the supermarket’s new CEO Dalton Philips reveals interim results on Thursday (9 September)

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