Alongside a first-quarter trading update, Ocado Retail has given some insight into how the panic buying linked to the coronavirus is impacting its business.
The online grocery retailer, which is now a joint venture between the Ocado Group and Marks & Spencer, saw a 10.3% uplift in revenue to £441.2m over the 13 weeks to 1 March. Average orders per week rose by 10.2% to 343,000, while the average order size edged up 0.3% to £110.24.
The impact of the coronavirus was limited during the period. However, the group confirmed that demand has picked up significantly in recent weeks with growth in the second quarter so far double that of the first.
Ocado yesterday stopped accepting new orders after experiencing “a simply staggering amount of traffic” to its website and more demand for products and deliveries than it could meet. Existing customers with orders will still receive them.
“This temporary closure will allow us to complete essential work that will help to make sure distribution of products and delivery slots is as fair and accessible as possible for all our loyal customers,” it added.
However, despite the jump in demand for its service, Ocado today sounded a cautious note, keeping its guidance for annual revenue growth unchanged at 10-15%. It highlighted that the strong increases now could give way to a fall later as customers burn through their stockpiles.
Ocado Retail’s Chief Executive Melanie Smith said: “We expect the impact of forward buying to unwind at some point.
“However Coronavirus unfolds, what is clear is that the fundamentals at Ocado Retail are strong, illustrated by double-digit increases in customer orders, driven by consistent execution, which deliver a best-in-market customer experience.”
She also stated that preparations for its switch from Waitrose to M&S products this September were on track, whilst adding: “We are looking forward to building closer and stronger relationships with our branded suppliers as part of the transition.”
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- Only double?
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