Ocado reports 15% rise in group sales
Ocado has reported that its latest quarterly revenues rose by 13.6% to £286.4m while group sales (which include Morrisons.com) rose by 15.4% to £314m. The online retailer’s chief financial officer Duncan Tatton-Brown pointed out that Ocado achieved these record figures despite the fact that Amazon had launched its AmazonFresh grocery delivery service during this quarter.
Although Ocado’s sales were on the up, it seems that some investors still felt jittery about the intensely competitive online grocery delivery market. The value of Ocado’s shares dropped by more than 10% in today’s trading.
As previously reported, Ocado has recently struck a new deal with Morrisons for deliveries nationwide. On the downside, however, Morrison has also agreed to work with the AmazonFresh service and it strengthened its ties with the Seattle cyber colossus still further when it announced on Sunday (11 September) that it will be installing “hundreds” of Amazon Lockers at its supermarkets this year.
Commenting on the Ocado results, Martin Lane, a representative at www.money.co.uk, said: “While Ocado posted really positive results this morning, shares slumped because their Chief Exec admitted they’re under real pressure due to the continued battle of the supermarkets. It’s fairly unusual for a CEO to talk so candidly about the difficulties it’s facing so investors acted tentatively.
“With Aldi and Lidl causing mayhem for the whole sector by driving down prices, Ocado now faces huge competition from Amazon too. This is only going to intensify the price war between the online supermarket retailers, which is a good thing for bargain hunters and shoppers on a budget.
“Ocado’s results are a strong sign that its strategy to be the busy shopper’s best friend has most definitely paid off. Let’s just hope they don’t have to sacrifice some of the great development work they’ve ploughed into their website to make a profit.”
