This represented its fourth consecutive period of quarter-on-quarter growth and a significant increase against the 7.2% growth reported in Q3.
Ocado said volumes grew consistently over the period, up 4.8% year on year.
Meanwhile, average orders per week were up 6.3% to 407,000 and average customers reached 998,000 at the end of the quarter, representing growth of 5.9%.
Total average basket value was up 3.8% while basket size (number of items) remained broadly stable quarter on quarter at 44 items per order.
The retailer’s average sales price was up 5.4% year on year, which it said was lower than market inflation and reflected its focus on improving pricing relative to the market.
Ocado said it delivered a “record” Christmas and hit its highest ever level of sales over the peak trading period.
Demand was high and it sold over 90% of peak Christmas slots released (22nd-24th) by mid-October.
Between December 20th and 24th, sales overall increased 7% and volumes were up 3%, including a record day for items delivered on 23 December.
Ocado noted that its percentage of ‘perfect orders’ (on time and in full) increased 6ppts across the year, with 99% of items delivered as promised and a 24% improvement in products not fulfilled.
Consumers are being offered better choice, with the number of M&S products on site increasing to around 90% of the addressable range and more Ocado own-label products being introduced.
Ocado Retail CEO Hannah Gibson said: “We made significant progress in 2023. We have focused first and foremost on being a great shopkeeper, improving our unbeatable range, great value and unrivalled experience – all underpinned by improved cost efficiencies. Our Perfect Execution programme set a high bar for our performance, and we are pleased to have finished the year with strong momentum. Thank you to everyone at Ocado Retail, M&S and Ocado Group who’ve worked so hard to deliver the first year of our strategy and these encouraging results.
“We are starting the new year with over one million active customers. Over the next 12-18 months, we will be embedding the foundations we have laid this year and raising the bar again for online grocery shopping. We have a really strong platform to build on in 2024.”
In 2024 Ocado said it hoped to continue its “encouraging momentum”, growing sales volumes ahead of the market.
It expects the positive trends in customer acquisition to lead to sustained volume growth in 2024. However, revenue growth is likely to be impacted by lower growth in average selling price, as it invests in value and as food price inflation continues to subside.
Overall revenue growth in 2024 is expected to be in the mid-high single digits.
Meanwhile, it expects to make further progress on efficiencies and operational leverage “on our journey towards” a high mid-single digit EBITDA margin in the medium term.
Online beauty and nutrition giant THG posted moderate fourth-quarter sales growth of 1.1% in the three months to 31 December.
It said it saw “pleasing” cyber performance, especially across THG Beauty, supported by accelerating growth in app penetration driving valuable first-party customer data, reducing reliance on paid marketing channels.
The group’s beauty business built on positive Q3 exit momentum, delivering Q4 revenue growth of 2.6%.
Some of the best performances came from THG’s own beauty brands Perricone MD and ESPA, as well as its retail platform Cult Beauty.
Performance in the UK (over half of total beauty revenue) was especially strong, delivering 9% revenue growth in the quarter.
In nutrition, full-year revenue growth was flat as it managed the business throughout the year with a focus on profit margins.
Following the normalisation of global commodity prices, strong margin progression has been delivered through the year with FY2023 set to be a record THG Nutrition EBITDA performance, reaping the rewards from the prior year investment in pricing strategy.
THG Ingenuity saw total revenues drop 5.7% to £197.7m, but external revenues were up 8.1% to £44.3m while internal revenues fell back 9.1% to £153.4m.
Q4 2023 was the first quarter to see the benefits of the decision taken in 2022 to pivot to more complex, higher margin enterprise clients, with external clients delivering double-digit revenue growth in November and December.
THG said 2023 continuing adjusted EBITDA expected to be above £117m, with group adjusted EBITDA over 75% higher year on year.
“Exit momentum from 2023 underpins our confidence in all divisions delivering growth in FY 2024,” it stated.
THG CEO Matthew Moulding said: “2023 was a year that threw up many challenges for all businesses, and I’m delighted in how the group not only responded to these challenges, but grew stronger through the year.
“Despite consciously reducing capex levels from previous years, we still made significant investments in the group’s long-term future and extend competitive advantages. In 2023 we reinvested c.£125m of the group’s positive operating cashflow into capex initiatives, mainly within the UK economy.
“The decision in 2022 to support consumers through the cost of living crisis, sacrificing near-term profits for long-term customer loyalty, bore fruit in 2023. This, and the easing of commodity inflation, will help Nutrition to deliver a record profit performance in the year, despite a 13% devaluation in the Japanese yen in 2023 – Nutrition’s second-biggest market.
“Whilst the economic background remains uncertain there are some optimistic signs, with consumer cost of living pressures set to ease further in 2024. We are confident that the investments and decisions made throughout the year position the group well to build upon the positive exit momentum.”
Private label goods supplier McBride has ended its first half to the end of 31 December with adjusted operating profits ahead of expectations.
Group revenue was 9.9% higher than the prior year on a constant currency basis, benefiting from both volume growth and the impact of pricing actions in the last financial year to recover input cost inflation.
Overall volumes in the period were 6.4% higher, driven by continuing momentum in private label (private label volumes grew by 10.1%) as consumers continue to mitigate cost of living pressures.
While input costs have generally stabilised, energy, employment and financing costs continue to apply inflationary pressures. Additionally, the group continues to manage significant supply chain volatility.
The group’s focus on reducing debt and maintaining tight control of costs resulted in net debt closing the period at £145.7m down from £166.5m six months previously.
The group continues to anticipate that net debt/adjusted EBITDA will be close to 2x by 30 June 2024.
Retail technology group Eagle Eye posted 20% revenue growth in the six months to 31 December, while adjusted EBITDA also increased by 25% to £5.9m.
Eagle Eye continued to expand across its target geographies in the period, securing a high level of new wins, with highlights including two five-year loyalty contracts in North America, bringing Eagle Eye’s total North American customer numbers to eight, including the first win for EagleAI.
Other wins include a three-year contract with an Australian retailer, and a three-year contract with The Ivy Collection in the UK, a popular group of brasseries and cafés, to power its colleague discount scheme.
The group’s continued strong performance has been supported by the deepening of existing relationships, delivering a continued strong level of net revenue retention.
The company’s newly acquired business, Untie Nots, continues to perform strongly, expanding with existing customers, including E.Leclerc, as well as entering new territories through the strength of the Eagle Eye sales and marketing efforts.
The group’s AI offering, EagleAI, was successfully launched last week at the world’s largest retail trade show, NRF in New York, and it announced its first customer for EagleAI last week.
For 2024 it expects to deliver results in line with management expectations.
“Retailers around the world are continuing to assess how best to provide highly relevant, personalised promotions and loyalty offerings to their customers, including leveraging the benefits of data science and AI,” it stated.
“The proven ability of Eagle Eye’s AIR platform to deliver personalised promotions, in real-time, at the scale and speed required by the world’s largest retailers, continues to drive a growing sales pipeline.”
CEO Tim Mason added: “Through the AIR platform’s ability to deliver hyper-personalised messages to consumers at speed and scale, we are in a strong position to be an enabler of the advancements taking place in the world of retail marketing.
“With a growing addressable market, a newly launched AI-powered offering, EagleAI, an outstanding team and high-quality business model driving growth in revenue, profits, and cash generation, we are extremely excited about the future of Eagle Eye.”
On the markets this morning the FTSE 100 is down another 0.4% to 7,564.8pts.
Risers include THG, up 6.9% to 71.8p, Ocado, up 5.3% to 651.9p and Naked Wines, up 2.6% to 54.9p.
Fallers include McBride, down 8.1% to 82.5p, Nichols, down 3.9% to 1,105p and Virgin Wines, down 1.6% to 37.4p.
Yesterday in the City
The FTSE 100 started the week falling back 0.4% to 7,594.9pts.
Just Eat Takeaway.com was down 8.6% to 1,131p ahead of its trading update this week, while Ocado was down 5.1% to 619p ahead of this morning’s market release.
The day’s risers included Virgin Wines, up 10.5% to 38p, Bakkavor, up 8% to 91.8p, Fever-Tree Drinks, up 4.9% to 999p, Glanbia, up 4.3% to €14.81, Kerry Group, up 3.5% to €78.00 and Britvic, up 1.6% to 853p.