Sainsbury’s online shopping business is almost double the size of Ocado’s, the company has claimed.
Sainsbury head of online marketing Penny Slatter said claims made by Ocado chief financial officer Jason Gissing that it was set to overtake Sainsbury’s to You in a few months (The Grocer, December 6, p12), were “pure fantasy”.
Even by its own measure, Ocado’s sales were “approaching” £1.5m a week - or £78m on an annualised basis, said Slatter. Sainsbury, by
contrast, was taking £2.8m a week, or £145.6m a year on an annualised basis, from 35,000 online orders a week and an average basket of £80 and rising. Sainsbury’s to You was also confident of breaking even at an operational level by March 2004, she added, with losses reducing as volumes have increased.
However, the company has also improved its picking systems, worked to optimise its delivery routes, and optimised its fleet to cut staffing costs, which was the most expensive part of the business.
The operation runs from 80 stores and a picking depot in Park Royal, London.
“We are basically running four models. They are a picking centre; standard store picking; a hybrid model picking low volume items from the front of stores and higher volume goods from the store backroom and a fourth, low-tech model for small stores that enables us to make a profit on low volumes.”
Elaine Watson