Ocado Group CEO Tim Steiner has said the grocery sector is “back on a trajectory where we’re going to see continual channel shift towards online”.
He said that this “long term, structural and inevitable” shift would occur as consumers “want to do better things with their lives than spend their time driving to supermarkets and walking the shelves”.
“It’s also the improvement in the proposition, the service and the pricing that online can offer.”
While Steiner believes that the future of the grocery industry is online, the business’ retail arm, which is half owned by M&S, saw an underlying EBITDA loss of £2.5m in the six months to 28 May.
He admitted that Ocado’s performance is “disappointing” in comparison to where the group had hoped it would currently be when the joint venture was struck four years ago.
Steiner said that while the Covid-19 pandemic “drove enormous volume and good profitability…we came out of it with less customers than we went in.”
However, he added that Ocado Retail is “moving forward aggressively and making great progress”.
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The online grocer has been pushing ahead with its “customer-driven” reset plan, which aims to improve the availability, quality and life of each product on the site, as well as increase the M&S product offer.
Steiner said that both partners in the joint retail venture “are in agreement” adding “everyone’s pleased with the progress we’ve made and everybody’s very happy with the direction”.
However, during its annual general meeting last week, M&S chief executive, Stuart Machin, said he was “frustrated” to see three quarters of the supermarket’s products that had been recently listed on Ocado’s website, were unavailable to buy.
He also stressed that he was left unhappy when Ocado fails to feature M&S branding in adverts or emails.
However, this is set to change as part of the transformation plan, and Machin admitted the “potential is pretty huge.”
Looking to fulfill these goals and attract new customers to Ocado, Steiner said that it is offering “outstanding value”.
Prices of more than 100 everyday items were reduced by 25% in late June and earlier this year, the grocer launched its new Price Promise, which looks to compare prices against over 10,000 like for like products at Tesco.
“We’ve invested ahead of the market into pricing and we’ve improved our buying relative to the market,” he added.
