Online supermarket Ocado Retail lowered its annual sales outlook as it reported a 5.7% year-on-year fall in revenue in its latest quarter, which it said partly reflected a softening of the overall market.
The business, a 50:50 joint venture between Ocado Group and Marks & Spencer, said smaller basket sizes offset an increase in the number of customer transactions in its fiscal first quarter to February 27.
It said it now expected revenue growth in 2022 'closer to 10%', having last month forecast growth in the 'mid-teens'.
Ocado Retail said its caution reflected uncertainties over inflation, which have increased significantly in recent weeks due to the war in Ukraine, the overall level of market demand, and the continued return to pre-COVID shopping patterns.
Britain was under COVID restrictions during the comparable quarter last year, prompting many more people to shop online.
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'Encouraging For Ocado Retail'
"The last quarter has been encouraging for Ocado Retail despite the clearly evident challenges the industry and consumers are facing," commented Melanie Smith, Ocado Retail chief executive.
"Active customers have increased by 31%, demonstrating the continued strong appetite for Ocado's unique and market-leading brand of online grocery. 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. "
It said it had increased some retail prices, where increased costs could not be mitigated, in line with the rest of the market, and would continue to monitor the market to ensure alignment on prices.
"Long term, we are confident that the trajectory of growth remains positive," Smith added.