Ocado steps up price battle in bid to bag shoppers

Online grocer Ocado, which last week disappointed the City with a slowdown in sales growth to 9.9% in the third quarter from 12% in the first half, has drafted in price monitoring technology specialist Profitero to help.

Profitero, which has worked with retailers including Tesco, collects data on pricing, promotions and availability. Its services should enable Ocado to react rapidly to changes in prices at its rivals.  

Ocado is engaged in a struggle for shopper spend as it fights a long-standing perception among some consumers that it is expensive. Last month Ocado launched its Low Price Promise, which matches against branded and equivalent own-label Tesco and Waitrose products.

Chief executive Tim Steiner told Retail Week that the initiative has “corrected” shoppers’ views.

He said: “We are working on price perception so people do not see us as a premium service. We have the best service solution. The Low Price Promise has corrected that price perception and we now have a strong price reality.”

The Low Price Promise was piloted in Manchester. Ocado has since extended the pledge to customers served by its Bristol and Oxford distribution spokes, which account for between 15% and 20% of its business. 

Thomas Thomaidis, head of grocery merchandising and insight at Ocado, said the tie-up with Profitero would be a further weapon in its pricing armoury. 

“Accurate pricing information is vital for Ocado to find opportunities to improve our value and range offer,” he said.

Profitero chief executive Volodymyr Pigrukh said: “Profitero’s pricing intelligence can help you see where your prices are too high – losing out on sales – and where prices are too low, losing out on profit margins.” 

• Waitrose has introduced a new ready meal range devised by celebrity chef Heston Blumenthal. The new premium range, Dine In, will join the upmarket grocer’s substantial own label ready meal offer. This includes its essential Waitrose, mid-tier; Lovelife, Lovelife You Count and Menu own brands. The range has been introduced as Waitrose attempts to gain a share of the lucrative ready meals category, forecast to be worth £2.2bn in 2012 by Mintel. The ready meals are derived from Blumenthal’s Cook at Home book and the range includes fish pie, lasagne, chilli con carne, shepherd’s pie and macaroni cheese.