Ocado sales up in Q1

Average orders per week jumped 13.4% to 116,987, while the average order size was £115.49, which was down on the £118.06 recorded in the same period last year.

Ocado said it is operating at “record levels of capacity” at its Hatfield Customer Fulfilment Centre after enhancements enabled “improved performance”.

It said it achieved its highest number of orders delivered in a week in the first quarter, exceeding 134,000.

The etailer said: “Further improvements will come on stream over the next quarter which will increase capacity, operational efficiency, and customer service performance.”

Ocado chief executive Tim Steiner said: “We have continued to work hard on developing the offer for our customers.

“Specific focus has been placed on price and range initiatives, including growing our own label and non-food offers, as well as the continued roll out of our Saving Pass scheme, supporting our objective of offering our customers the widest range at highly competitive prices.  

“Despite the continuing economic headwinds in the UK, more and more consumers are seeing the benefits of online grocery shopping, and in particular, the service that we offer.

“Evidence suggests we have largely overcome the operational challenges we faced in expanding our Hatfield capacity in the second half of 2011, and are set to meet growing demand through the rest of the year.  We expect to see acceleration in sales growth as the year progresses.”  

Ocado was forced to issue a profit warning in December after capacity constraints hit productivity.

Ocado said its operational performance “continues to improve”, with 93.2% of orders on time or early, compared with 92.3% in the same period last year.

Ocado is targeting a rapid increase in its product range from 21,000 SKUs to more than 40,000 in the next 18 months.

This includes an rise in own brand products from 600 to 1,000 as it looks to “fill in the gaps” in ranges at a lower price that Waitrose products.

Finance director Andrew Bracey told Retail Week: “We have introduced new machinery, new software and new ways of doing things. We have improved our resilience and capacity and have stablised our operations.”

Ocado said its spoke network has been increased with an opening in Oxford, “adding to the efficiency of our distribution network”.

The firm has brought the Order Storage & Retrieval (ORS) system onstream in the last month and is trialling a newer version of the unique system which will allow a rapid increase in non-food lines.

The etailer is set to bring non-food lines, including baby products, kitchenware, and cosmetics, onstream “in the next few months”.

It is expected to open its second facility in Dorden at the start of next year, creating more than 2,000 jobs in the process. “The building is finished and we will ebgin testing the machinery in the summer,” Bracey added.