Ocado Retail has reported strong first-quarter trading figures after moves to improve its price competitiveness and product range boosted customer numbers.
Over the 13 weeks to 3 March, the online grocer’s revenue rose 10.6% to £645.3m, with volumes climbing 8.1%.
Meanwhile, average orders per week increasedd 8.4% to 414,000 after the number of active customers rose 6.4% to 1.02 million. Average basket value was up 2.1% to £125.47, while the number of items per basket was stable at 45.
“We have made a strong start to the year, building on the momentum we established in 2023 through the progress of our Perfect Execution programme,” said CEO Hannah Gibson.
She highlighted that the business had been making improvements to its proposition. During the quarter, Ocado “enriched” its product range with more M&S grocery lines and the debut of Makers Market, a showcase for smaller brands. Improvements in slot and product availability and the lowering of prices on 1,700 more products also helped attract shoppers.
Gibson concluded: “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.”
Ocado Retail stated that there was no change in its full-year guidance, with revenue growth of “mid-high single digits” and an underlying EBITDA margin of around 2.5%.
Ocado Group and M&S are currently wrangling over a final payment for M&S’s share of the Retail venture formed in 2019. M&S claims the business has not met the performance criteria for the payment, while Ocado says the target should be adjusted and has threatened legal action.
Gibson revealed today that conversations between Ocado and M&S over the payment were “ongoing”.
She added: “I know there’s been a lot of focus externally on our shareholders, but I am just 100% focused on running the business, improving the proposition for our customers.”
NAM Implications:
- Ocado patently improving on key metrics…
- …whilst also providing access for emerging brands.
- But more coordination with M&S products and positioning would help.
- (A pity if a legal spat with M&S is allowed to dilute the progress….)
