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Ocado Retail has made a “strong” start to the year as the joint online venture with M&S continued to grow its market shares.

A 8.1% jump in volumes in the 13 weeks to 3 March helped revenues rise 10.6% to £645.3m, according to a trading update this morning.

Average orders grew 8.4% year on year to 414,000 a week, which the retailer said reflected strong growth in active customers, up 6.4% to 1.02 million by the end of the quarter.

Average basket value was also up 2.1%, while basket size was flat at 45 items.

The group said a focus on its pricing strategy meant average selling price rose just 2.2%, which it added was “significantly” below the market.

Ocado Retail’s online market share rose to 13.5% at the end of February, up 0.7% over the year.

CEO Hannah Gibson added the retailer had built on the momentum established in 2023.

“We are delivering improvements in our proposition for customers, across unbeatable choice, unrivalled service and reassuringly good value,” she said.

“During the first quarter, we stepped up our efforts: enriching our product range with the strong growth of core M&S grocery lines and the debut of Makers Market, using our unique model to showcase incredible small brands; further enhancing slot and product availability; and lowering the price of 1,700 more products in our latest Big Price Drop promotion alongside further expanding the Ocado Own Range.

“Our strategy is resonating with customers and volume growth is building well. There’s still so much more we can do and I’m looking forward to raising the bar even further in 2024.”

Shares in parent group Ocado jumped 3.1% to 466.7p as market opened.

Morning update

Kantar grocery market share update

Grocery price inflation has dropped to 4.5%, its lowest level since February 2022, but 23% of British households still identify themselves as struggling financially, according to the latest monthly report from Kantar.

But despite shoppers remaining focused on value sales of branded goods pushed ahead of own label this month.

Take-home grocery sales rose by 4.6% over the four weeks to 17 March, with an early Easter boosting sales of seasonal treats in the first three months of 2024 by £88m compared with the same period last year.

Ocado was the fastest growing retailer this month, benefiting from a sustained voucher campaign which helped it attract customers. The retailer improved sales by 9.5% in the latest 12 weeks, ahead of the total online market which rose by 6.6%, to account for 1.9% of all take-home sales. It was the only grocer other than Waitrose to boost its number of shoppers in the latest three months.

Fever-Tree success in US boosts sales

Profits have fallen at Fever-Tree Drinks despite the premium mixer company lifting revenues in 2023 as inflationary challenges continued to hurt the group.

Adjusted EBITDA declined 23% to £30.5m as gross margins were squeezed to 32% as the business was hit by trans-Atlantic freight rates and high energy costs linked to glass production.

Revenues in the year to 31 December 2023 rose 6% to £364.4m thanks to soaring growth of 22% in the US, which was offset by a 1% fall in the UK.

It means the US is now the group’s biggest market.

Fever-Tree said it had started 2024 in-line with expectations and remained on track to double EBITDA in the year.

CEO Tim Warrillow added: “2023 was a year when the Fever-Tree brand once again grew in breadth and depth, with market share gains across the globe.

“Perhaps the most significant milestone was establishing the US as our largest region, and with it, extending our market leadership position in both the US tonic water and ginger beer categories.”

AG Barr lifts sales and profits

Revenues and profits have soared at AG Barr thanks to the addition of energy brand Boost to its portfolio alongside price rises.

Sales in the year ended 28 January 2024 rose 25.9% to £400m, with a like-for-like increase of 8%.

The Irn-Bru maker said the increase was driven by core brand distribution gains and higher prices to support margins.

Pre-tax profits also jumped 15.5% to £51.3m.

CEO Roger White said: “I would like to take the opportunity to thank all of the teams across the group who have worked incredibly hard to deliver this excellent financial performance.

“With our business in a strong financial position, and our portfolio of differentiated brands poised for further growth, I have every confidence that our proven strategy, our results-driven teams and our well-invested asset base will continue to support long-term growth and value creation.”

Separately, AG Barr announced commercial director Jonathan Kemp was leaving the business because of family health reasons.

Kemp, who has been with the business for more than 20 years, will retire as a director after the AGM in May and step down from his commericial role on 30 September.

AG Barr has kicked off a recruitment process to find his successor.

Clean Food secures additional £2.5m

Sustainable oils business Clean Food Group has secured £2.5m in additional funding from climate-specific UK venture capital fund Clean Growth Fund Management.

The funding will be used to accelerate the commercialisation of Clean Food Group’s sustainable oils and fats technology.

Morning shares

The FTSE 100 opened down 0.2% to 7,904.73pts.

Alongside Ocado, shares in Fever-Tree also rose 1% to 1,087p on the back of its results, while AG Barr jumped 1.8% to 523.1p.

Other risers include Virgin Wines, up 3.3% to 42.9p, and Glanbia, up 2.8% to €18.20.

Naked Wines and Kerry Group arre among the early fallers, down 2.1% to 55.5p and 1.1% to €81 respectively.

Yesterday in the City

The FTSE 100 slipped 0.2% to 7,917.57pts on Monday.

Virgin Wines UK shares - which jumped by 10% in early trading - closed at 6% up for the day at 40.3p after the online operator announced a share buyback and said, in its first-half results, that it would meet full-year profit expectations. It is the highest the shares have been since October.

Other risers included PZ Cussons, up 3.5% to 88.4p, Naked Wines, up 3% to 56.7p, and B&M European Value Retail, up 2% ti 537.6p.

Losers included Ocado, down 3.4% at 452.6p ahead of this morning’s update, and Reckitt Benckiser, down 1.7% to 4,327.32pts.