Ocado Group, the British online supermarket, said its Ocado Retail joint venture with Marks & Spencer saw revenue rise 52% in the 13 weeks to Aug. 30, with the COVID-19 pandemic generating huge demand for online deliveries.
The retailer reported third-quarter retail revenue of £587.3 million versus £386.4 million a year earlier.
The growth compares with 27.2% in its first half and a second-quarter rate of over 40%.
Average orders per week rose 9.6% to 345,000, while an average order size of £141 was below COVID-related peaks but above pre-crisis levels.
"These are transformational times for Ocado Retail with M&S products now exclusively available online at Ocado.com," commented Melanie Smith, Ocado Retail's chief executive officer.
"The successful switchover means that M&S products are available to buy in a weekly shop side by side with branded products for the first time. As a result, we can now offer customers more choice and better value than ever before, wider ranges than any traditional retailer, and thousands of products that are only available online through Ocado.com."
Online Grocery Boom
Online grocery shopping has doubled its share of the UK market to 14% since the start of the pandemic and Ocado reckons it could reach 30% over the next few years.
The fourth quarter started with Ocado Retail replacing Waitrose products with M&S products from Sept. 1.
Ocado said customers have responded positively to the switch, with demand for the new range driving both an increase in the number of products in customer baskets and strong forward demand.
It said the performance of Ocado Retail in the first three quarters of the year, combined with the impact of operational leverage in the retail business, suggested, given current trends, full year 2020 core earnings (EBITDA) for Ocado Group of at least £40 million. It made £43.3 million in 2019.
Shares in Ocado, up 84% this year, closed Monday at 2,355 pence, valuing the business at £17.5 billion – more than double the combined market capitalisation of Sainsbury's and Morrisons.