Ocado has published a sales increase of 15.3 per cent to £312.4 million over the 12 weeks leading to 21 February, with an average of 214,000 orders being placed on its site each week, though the value of the average order dipped by 2.9 per cent.
This prompted an increase of 3 per cent in the online company’s share price, which fell after Amazon cemented its deal with Morrisons. Ocado CEO Tim Steiner was quoted by the Financial Times as saying, "We are pleased with the steady progress in our business, maintaining double-digit sales growth in a retail environment that remains challenging."
Kantar Retail, however, suggests that many Ocado investors are dissatisfied by the fact that the company has yet to arrange a partnership that would allow for overseas trading.
Financial director Duncan Tatton-Brown told The Guardian, "This is not a race. It isn’t that if we don’t sign in the first couple of months of this year, we have failed. This is a long-term game, and we are building our capabilities and talking to partners around the world.
"We never envisaged that in the short term we would be able to deliver a centrally picked order to customers north of Aberdeen. We always envisaged a different solution to that. We don’t think our model is suited to the extremities of the UK."
Ocado has entered into negotiations with Morrisons regarding allowing the latter to use its logistical plant in Erith, south-east London, thus enlarging the scale of its supply-chain contract.
Kantar analyst Ray Gaul, however, believes that the new Morrisons-Amazon axis casts doubt on the "long-term growth prospects and profitability of the Morrisons partnership [with Ocado]".
"Investors are losing patience with [Ocado chairman] Lord Rose and Tim Steiner’s promises to diversify into international markets and sign retailers up to the Ocado Smart Platform business-to-business software solution," he added in relation to Ocado’s lack of non-domestic expansion.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here