Ocado has raised its full-year guidance following a significant increase in retail sales during the third quarter.
- Sales surged by 15.5% to £658 million, with volumes showing a growth of 15.4% year-on-year.
- Average weekly orders increased by 14.7%, driven by a 10.3% rise in active customers.
- The company has implemented multiple price cuts since June to improve value perception.
- Despite inflation, the average selling price decreased slightly, contributing to stable basket values.
In its latest update, Ocado announced an upward revision of its full-year sales forecast, crediting a notable 15.5% increase in retail sales for the third quarter, amounting to £658 million. This growth marks a significant jump from previous expectations, with volume also rising by 15.4% compared to the previous year.
Average weekly orders at Ocado have climbed by 14.7%, reaching 437,000. This positive trend is primarily attributed to a 10.3% increase in active customers, totalling over 1.06 million. Enhanced slot availability and a fortified overall proposition have played key roles in attracting more frequent patronage.
The company’s strategic focus on price competitiveness saw its sixth round of price reductions this year, which Ocado cites as crucial to bolstering its value image. Although the UK experienced grocery inflation of 2%, Ocado managed to lower its average selling price by 0.4%, helping maintain stable basket sizes, which have seen a slight year-on-year increase.
Despite the challenges posed by inflationary pressures, Ocado’s efforts to offer better value have resulted in an average basket value that remains broadly stable at £120.97. This consistency underlines the effectiveness of Ocado’s pricing strategy amidst fluctuating market conditions.
Hannah Gibson, Ocado Retail’s Chief Executive, stated, “Our strategy remains focused on giving our customers unbeatable choice, unrivalled service and reassuringly good value. We’re seeing the momentum of this, with more customers shopping with us more often, getting even better service at better value.” Gibson highlighted the introduction of more diverse product choices, improved service availability, and ongoing commitment to value through initiatives like the ‘Big Price Drop.’
Ocado’s revised sales targets and strategic initiatives reflect its optimistic outlook and commitment to delivering value amid challenging market dynamics.
