Ocado hit by £23m loss as retail growth stalls

Online grocer Ocado has continued its long streak of losses after revealing retail sales growth had plummeted since February.

Retail revenue grew by 19.8 per cent in the six months to May 30, well below the 39.7 per cent recorded in the first quarter.

Ocado, which agreed a £750 million partnership with Marks and Spencer in September, blamed the fall on customers buying less and eating out more.

“Uncertainties remain regarding the performance of Ocado Retail in the second half as Covid restrictions continue to ease,” the group admitted in a statement.

READ MOREOcado banned from building Islington warehouse

It claimed the dwindling basket sizes were offset by a “strong increase” in transactions.

Ocado posted a £23.6 million pre-tax loss overall, though this has narrowed from the £40.6 million loss last year.

“As we head towards a post Covid-19 future, it is increasingly clear that the landscape for grocery worldwide has changed,” chief executive Tim Steiner said. 

“Over the last eighteen months, we have shown that the Ocado model works even in the most challenging and fluid of environments.”

The company also revealed a new deal with Alcampo Retail, supplying the Spanish grocer’s 310 stores using its robotic warehouse services.

However, Ocado’s technology investments have proved costly, and it expects earnings from its non-retail business to fall by £30 million.

Eyebrows have been raised at the company’s heavy spending in recent months.

Some blamed this for its poor showing in February, when it became the FTSE 100’s worst performer.

with PA Wires

Finance

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