Ocado sales drop as Covid restrictions ease

Ocado has reported a 5.7% year-on-year drop in revenue for the quarter in its latest trading statement.

The online retailer said revenue for the 13 weeks ended 27 February dropped to £564.7 million. The drop in revenue partly reflected the 4% fall in UK grocery market sales.

Despite the drop in revenue, Ocado’s active customer base was up 31% year-on-year to 835,000 with average orders up 12% to 367,500 orders but this was offset by the average basket size dropping to £124, 15% lower than last year.

The grocer said that this drop in basket size reflects the shift in customer behaviours with eased lockdown restrictions and return to office working.

However, the retailer also highlighted that its first-quarter performance was up 31.7% compared with the first quarter of 2020.

The group highlighted a “significant” increase in its supply chain prices due to soaring inflation rates and Russia’s invasion of Ukraine.

READ MORE: Ocado secures tech partnership with Auchan Poland

As a result, the business moved certain retail prices, where costs could not be mitigated, in line with the rest of the market and will continue to monitor the market to ensure alignment on prices and delivery.

“The last quarter has been encouraging for Ocado Retail despite the clearly evident challenges the industry and consumers are facing,” Ocado retail’s chief executive Melanie Smith said.

“Of course, as we have seen since the end of COVID restrictions, the value of the average basket and shape of the week continue to normalise as we return towards the rhythm of our pre-COVID lives.

“Given that we are comparing a post-lockdown quarter this year with a lockdown quarter last year, this has meant that sales were down 5.7% in the quarter, not helped by the softening market overall.

“Long term, we are confident that the trajectory of growth remains positive.”

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