Ocado Retail – the joint UK venture between Ocado and Marks & Spencer – has posted modest first quarter growth despite smaller basket sizes as order numbers and prices increased.
The online retailer’s first quarter revenues were up 3.4% year on year to £584m for the 13 weeks to 26 February 2023.
That growth was driven by average orders per week rising 3.6% to 381,000 as active customers reached 951,000, up 13.8% year on year.
However, average basket value remained flat, with a 7.5% fall in basket size, to 45 items. This was offset by a 8.3% increase in average selling price, while order frequency returned to pre-Covid levels.
Ocado said its ‘perfect execution’ programme was driving improved service levels, with on time delivery and order accuracy back to pre-pandemic levels, while it increased its range of M&S products and made further investment in value through the launch of the Ocado Price Promise.
Hannah Gibson, Ocado Retail’s CEO, said: “We continue to attract more and more customers to Ocado, by investing in great value for customers including our new Ocado Price Promise and providing unbeatable choice and service. This means more perfect orders that are on time and in full, with deliveries back to the kitchen table. We are also championing smaller suppliers and creating more of the M&S magic for customers by offering more of the products they love.
“While the trading environment remains challenging, we expect to build momentum through the second half of the year, as we improve our proposition, grow our customer base, and no longer lap Covid shopping behaviours. This solid 2023 performance will enable us to return to sales growth and profitability.”
There is no change to guidance issued with Ocado Group’s annual results on 28 February, with Ocado Retail expected to show mid-single digit growth, improving during the year, and marginally positive EBITDA.
Ocado shares fell a further 2.5% today to 440.8p. The shares are down by 32% so far in 2023.
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