Ocado says sales boosted by rivals becoming distracted by discounters

The online grocer this morning reported that gross retail sales in its fourth quarter rose 14.9% in the midst of the intensely competitive grocery market.

Ocado chief financial officer Duncan Tatton-Brown told Retail Week there is an “element of truth” in some analysts suggestions that Ocado has been able to weather the grocery storm better than rivals that have been focused on fending off the rise of Aldi and Lidl rather than their online propositions.

“We think some of our competitors are not growing online as fast as they were, and it may be they’re distracted by certain events,” said Tatton-Brown.

Stephen Mader, retail insights director for Kantar Retail EMEA, said: “Competition in the UK supermarket industry is fierce, and Ocado has done a good job of navigating the storm, carving out a loyal shopper base while competitors have been preoccupied with the discounters.”

Shift in channels

Tatton-Brown said the key drivers of Ocado’s strong performance are its model, its extensive range and the “keenness of our prices”.

He also said Ocado is continuing to benefit from the “channel shift happening, as more and more customers wants to do their grocery shopping online”.

Ocado’s average orders per week were up 16.4% to 177,000 in the quarter, and Tatton-Brown said the etailer was benefitting from both attracting new shoppers and from existing customers shopping more often.

Tatton-Brown noted the challenging conditions in the market, saying 2014 had “not been a good year for total growth” across the grocery sector.

He remained confident on Ocado’s prospects for the golden quarter but said the etailer was being “careful” in how it approached Christmas so that it can meet customer demands around availability and deliveries.

“We’re confident about Christmas but we’re careful about Christmas,” he said.