Ocado Retail has posted a £4 million loss in its full year results, with sales dropping to £2.2 billion for 2022, in what the group described as “a challenging year for Ocado Retail”.
Annual results from parent company Ocado Group revealed a loss before tax of £501 million for 2022 (up from £176.9m in 2021), while retail sales fell 3.8% to £2.2 billion, despite record sales over Christmas.
The drop in retail sales has been attributed to soaring inflation and weak consumer sentiment, leading to declining basket sizes as shoppers chose value products and bought less amid the cost of living crisis, despite “robust customer growth”.
While active customer numbers have grown by 13% during FY22, the online grocer – a joint partnership with M&S – has seen sales drop as consumers respond to inflationary pressures, leading to a fall in basket volumes.
Ocado Retail described its progress on customer growth and fulfilment efficiency as “encouraging” during the year.
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“Over the last year every company has had its business model tested by a combination of macro-economic and geopolitical headwinds, and I am pleased that, thanks to the creativity and commitment of my colleagues, we have more confidence in our model than ever before,” said Tim Steiner, chief executive officer of the group.
“Ocado Retail… has shown its resilience against a backdrop of higher costs and smaller baskets, reflecting the Covid unwind and the UK cost of living crisis, by growing customer numbers and increasing online market share.
“As the Covid unwind fades and customer growth continues, the business will start to recover the fixed costs of recent capacity commitments.
“We are poised to leverage our technology leadership further with the imminent launch of a capital-light, highly efficient automated fulfilment solution outside of grocery.”
Ocado Retail CEO Hannah Gibson previously said she remains “confident” in the company’s value offering, despite consumers cutting back.
