Ocado Still Losing Money Despite Sales Increase
Ocado, the UK-based online retailer, is still losing
money despite significant increases in sales. The group reported sales growth of 13.9 per cent to £731.9 million for the 53 weeks ending 2 December 2012, although its pre-tax losses amounted to £600,000. While this is a significant decrease from the £2.4 million loss posted last year, Ocado has not yet made a profit since it began trading in 2002.
During the period EBITDA rose by 23.9 per cent to £34.5 million and revenues increased by 11.4 per cent to £664 million. The increases were underpinned by a range extension of 40 per cent to over 28,000 SKUs, and CEO Tim Steiner indicated that Ocado will increase its non-food offering from 8,000 to 15,000 SKUs by the end of 2013.
The groups ambitions for 2013 are clear having recently appointed Sir Stuart Rose, the former head of M&S, as chairman, coupled with the announcement of plans for a second fulfilment centre to "substantially increase our capacity".
Private label sales were up over 70 per cent year-on-year, with over 77 per cent of all shoppers' baskets now containing a minimum of one Ocado own brand product.
Commenting on the results Steiner said, "Against a tough economic environment, we continue to see that shopping online for groceries is of increasing importance for consumers evidenced by the online growth figures reported across the grocery industry."
However, the group's founders, three brilliant former Goldman Sachs bankers, will have to wait a long time before their investment starts to pay a Goldman Sachs-like return. (7 Feb)
© 2013 - ESM: European Supermarket Magazine by Kevin Kelly
