Ocado will be reporting its half-yearly results next Thursday (21 July), with analysts and investors looking for signs of rising costs and the effect they are having on customer behaviour and spend.
At the same time, shoppers will be looking out for signs that the online supermarket is recognising the squeeze being put on household finances, with many hoping for hints that food prices will be top priority for the grocer.
There have already been signs of changing shopper behaviour since Covid lockdowns and restrictions have ended, when the size of the average shopping basket soared.
In the first three months of this year, the average Ocado customer spent £124 per shop; down 15% on 2021’s figures but still higher than the pre-pandemic average of £110.
As such, the retail side of Ocado’s business – which is a joint venture with Marks & Spencer – is not expected to report a big jump in sales.
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Previous results from this year saw first quarter sales drop by 5.7%, while the business warned of a further 8% fall in the second. This prediction will be confirmed – or clarified – on Thursday.
AJ Bell investment director Russ Mould said that the fall “reflects inflation, higher cost of living and some volume retrenchment even at Ocado’s relatively well-heeled customer base”.
At the same time, Ocado’s global technology arm – which builds robotics-led fulfilment centres for supermarkets around the world – is also expected to reveal the results of its past six months.
“Having tapped investors for just shy of £600 million last month, there’s pressure to deliver some positive news on new partner sign-ups for Ocado Solutions,” said Matt Britzman, equity analyst at Hargreaves Lansdown.
“It’s all well and good having the most advanced robots flying around fulfilment centres, but further progress is needed on sign-ups sooner rather than later.
“Building out new customer fulfilment centres isn’t cheap and keeping costs in check is key. Management guided to around £800 million at the start of the year – it will be interesting to see if that’s intact.”
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