Ocado Retail achieved a “record-breaking” Christmas with its highest-ever level of sales over the peak festive period after benefitting from offering an extensive seasonal range from M&S.
The online grocer did not reveal actual festive trading figures, but last week Kantar data showed Ocado was the fastest-growing grocer over the 12 weeks to 29 December.
Ocado’s Christmas statement was included in its fourth quarter trading update for the 13 weeks to 1 December. This showed revenue had surged up 17.5% to £715.8m, with volumes growing 17.0% and average orders per week climbing 16.9% to 476k. The company noted that average selling prices were flat as it continued to invest in price to improve its competitiveness.
Performance was said to have been driven by its active customer base growth of 12.1%, which now stands at 1.1m, and greater frequency as more people shopped with the retailer more of the time.
Ocado continued to expand its offering, which now includes almost all of the M&S addressable range live on its site. The retailer stated that M&S products were helping attract new customers, matching the revival of the brand’s physical stores.
Meanwhile, investment in Ocado’s CFC network meant product availability and delivery slot availability both improved whilst it also added an additional half a day of freshness to the shelf life of its produce.
The strong fourth quarter meant the joint venture between Ocado Group and Marks & Spencer hit its full-year sales target of £2.7bn, up 13.9% on the year before. The retailer stated that the performance, as well as its continued focus on cost and efficiency, had resulted in “strong” EBITDA growth.
“2024 was a year of strong growth. In the fourth quarter, we accelerated sales again – reaching 500,000 orders per week for the first time at the end of November,” said Chief Executive Hannah Gibson.
“We’ve achieved this growth by being laser-focused on customer service and delivering unbeatable choice, unrivalled service and reassuringly good value to the households and families that we serve. We’ve made a series of significant improvements – including making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we’ve moved on price and helping new customers discover Ocado.
“As we enter the next phase of our strategy, we are excited about the future of online grocery and our role in shaping it. Priorities for this year are raising the bar again in our leading customer proposition, making further progress on improving profitability and transitioning the business onto new technology platforms.”
NAM Implications:
- Logic (and these results) suggests that M&S and Ocado find ways of working more closely together…
- …to optimise potential synergies, especially given the new customer appeal of M&S products.
- Other improvements to Ocado, especially in terms of service level/availability…
- …begs the question re whether even more potential gains could be realised via a split of retail and tech at Ocado?
