Ocado sales rise as M&S partnership goes live

The online grocer said retail revenues surged 52% to £587.3m in the 13 weeks to August 30, as average weekly order numbers increased 9.6% to 345,000. 

The group now expects to post full-year EBITDA of at least £40m.

Ocado started selling Marks & Spencer’s food products through its platform on September 1 and said shoppers had “responded positively” to the switchover from its former supply deal with Waitrose. 

The pureplay retailer-cum-technology specialist said demand for M&S ranges drove a five-item increase in its average basket size – and the number of M&S products featuring in the average basket is already higher than Waitrose prior to the switchover.

Ocado said the M&S range offered its customers “high-quality alternatives at the same or better prices” than Waitrose alternatives. 

The initial range of 4,400 M&S food products sits alongside 700 M&S home and lifestyle lines, including toiletries, baby, kitchen, dining and household products. 

As a result, Ocado said that 98% of its shoppers had already purchased M&S products. 

Ocado Retail boss Melanie Smith described the switchover as “transformational” for the business and insisted the change had been “successful”. 

Ocado was forced to apologise to a “very small number” of customers who had their orders cancelled on the day of the switchover. It also paused deliveries to staff members as it grappled with an order backlog. 

Smith said: “We can now offer customers more choice and better value than ever before, wider ranges than any traditional retailer and thousands of products that are only available online through Ocado.com.

“Our model brings customers the very best customer experience, supported by sustainable economics and respect for the environment and the communities we serve. Ocado’s innovative technology solution provides the best service metrics for any online grocery service in the UK.”

She added that Ocado remains “on track” to increase delivery capacity by 40% by next year.