“Ocado Shares Slide Despite Growing Customer Base”

Shares of leading online grocery specialist Ocado (OCDO) experienced a downturn, relinquishing their early gains and plunging by over 5% to 426p. Interestingly, this transpired despite the remarkable surge of nearly 14% in customer acquisitions during the 13-week period ending on February 26th, in comparison to the corresponding period of the preceding year.

Operating as a joint venture with Marks & Spencer (MKS), Ocado Retail divulged a modest yet noteworthy 3.4% escalation in retail revenue for the first quarter of 2023, amounting to a commendable £584 million. Additionally, the average weekly orders witnessed an encouraging rise of 3.6% year-on-year, settling at a commendable 381,000.

The first quarter concluded on a promising note, with active customers experiencing a commendable upswing of 13.8%, totalling 951,000. Aided by notable enhancements in service levels, encompassing timely deliveries and impeccable order accuracy, Ocado successfully attracted a wider customer base.

Hannah Gibson, the esteemed Chief Executive of Ocado Retail, expressed her contentment, stating, “Our unwavering commitment to customer satisfaction, characterized by compelling value offerings like the Ocado Price Promise, coupled with an unmatched selection and service, continues to entice an expanding clientele to Ocado.”

Acknowledging the prevailing challenges in the trading environment, Gibson expressed optimism regarding the second half of the year, emphasizing their focus on refining their proposition, augmenting their customer base, and overcoming the influence of Covid-driven shopping patterns. She confidently affirmed that this robust performance in 2023 would facilitate the resurgence of sales growth and profitability.

Russell Pointon, the perceptive Director of Consumer Research at Edison, lauded the first-quarter results achieved by Ocado Retail. He found them to be “reassuring,” underscoring the group’s unwavering dedication to customer-centric investments while offering a diverse array of choices and exemplary service.

Notwithstanding the positive strides made by Ocado Retail, food shoppers faced a disheartening reality, as revealed by the latest data from Kantar, a renowned research firm specializing in supermarkets.

Alarming figures indicate that grocery price inflation escalated even further in the previous month, surging to an unprecedented 17.5%. Consequently, this inflationary surge burdened the average household with an additional £837 annually.

The price hike predominantly affected essential items such as eggs, milk, and cheese, compelling consumers to diligently explore various shopping alternatives. Consequently, footfall surged across all major grocery retailers, with consumers increasingly visiting three or more of the top 10 retailers, according to Kantar’s research findings.

Within this dynamic landscape, Lidl emerged as the fastest-growing supermarket, while Aldi soared to new heights in terms of market share. Encouragingly, Morrisons experienced a resurgence, while Waitrose delivered its most impressive performance since September 2021.

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