Ocado sales fall following end of Covid restrictions

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Ocado has attributed a decrease in revenues to a “softening market” as restrictions eased and more customers returned to offices.

For the first quarter covering the 13 weeks to February 27, Ocado reported revenues of £564.7m. This marked a 5.7% drop from the same period last year.

Average basket size also declined to £124, a decrease of 15% compared with 2021 when the UK was in lockdown.

However, Ocado also saw active customer numbers increase 31% year on year to reach 835,000.

Order numbers rose 11.6% over the period to 367,500 orders per week.

The online grocer flagged “significant increases” in raw materials, product cost prices, energy, utilities and dry ice throughout the quarter, which created “further cost headwinds” for the industry as a whole.

Ocado said it had been engaging with suppliers to manage inflation, but it had raised prices of some items “where costs could not be mitigated”.

As a result of ongoing uncertainty, the online grocer stated that its full-year growth rate would be closer to 10%. Previously, Ocado had stated in its 2021 full-year results that it anticipated “strong, mid-teens revenue growth in 2022”.

Ocado Retail chief executive Melanie Smith said: “The last quarter has been encouraging for Ocado Retail despite the clearly evident challenges the industry and consumers are facing. Active customers have increased by 31%, demonstrating the continued strong appetite for Ocado’s unique and market-leading brand of online grocery.

“Of course, as we have seen since the end of Covid restrictions, the value of the average basket and shape of the week continue to normalise as we return towards the rhythm of our pre-Covid lives.

“Given that we are comparing a post-lockdown quarter this year with a lockdown quarter last year, this has meant that sales were down 5.7% in the quarter, not helped by the softening market overall, with smaller baskets offsetting the increase in the number of customer transactions in the quarter.”