Ocado Retail Ltd – the joint venture between Ocado and M&S – has reported a 35 per cent increase in revenue reflecting strong demand for online grocery.
Retail revenue for the business was £579.6m for the 13 weeks ended 29 November, up from £429.7m for the same period last year. The retailer received 360,000 orders per week on average over the fourth quarter.
The retailer said its trading performance benefitted from the social distancing measures which were introduced in early November. This led to a “smoothed” trading week compared to the “peaks and troughs” of normal shopping habits pre-Covid.
As a result, Ocado Retail has updated its full-year profit forecast to over £70m.
M&S acquired a 50 per cent stake in Ocado’s UK retail business in 2019. M&S products sit alongside Ocado’s own brands and others on its website as part of a full online ordered home delivery service.
Melanie Smith, Ocado Retail’s chief executive officer, said: “We continue to make good progress bringing even greater choice, quality, and value to our customers following the switchover to M&S at the beginning of September. At Ocado Retail we are constantly looking to raise the bar even further and the addition of M&S products to our grocery ranges has enhanced what was already the widest choice of products available online.
“Despite exceptional demand during the period, we have high rates of on-me customer delivery and low rates of substitutions. This, together with our commitment to competitive prices and the freshest produce available, all delivered in a way that minimises handling and maximises hygiene, has strengthened our credentials as the UK online grocery market leader in terms of customer experience.”
Ms Smith added that Ocado plans to open 3 new warehouses in 2021, which will give the business 40 per cent more capacity.
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