Ocado hails warehouse success as sales slacken
Online grocer Ocado has posted a slowdown in retail sales growth, but hailed the success of its newest warehouse after it had 20,000 orders since opening.
The group said retail revenues rose 11.5% over its third quarter to September 2 – a slowdown on the 11.7% growth seen in its first half.
Despite the slight pullback on growth, Ocado said it remained within its predicted growth range for the full year of 10%-15%.
Average total orders per week rose by 11.4% to £283,000, with the average value of customer orders staying largely flat at £106.26.
It cheered a good performance from its newest state-of-the-art warehouse in Erith, south-east London, which it said had processed more than 20,000 customer orders in the first 14 weeks since launch.
It said this took its other recently opened site in Andover, Hampshire, 15 months to achieve.
Erith has the potential to become the largest automated warehouse for online grocery in the world, at full capacity, it added.
Ocado’s chief executive Tim Steiner said: “The new capacity from Andover and Erith, our robotic third and fourth warehouses, is helping meet consumer demand for our services and drive the channel shift which is transforming grocery retailing in the UK.”
He added the group was on track to deliver a raft of new robotic warehouses for retailer partners over the coming years.
Ocado is “fulfilling our goal of changing the way the world shops”, he said.
The group, which works with Morrisons in the UK, has recently announced long-awaited international deals, sending its shares soaring.
Ocado enables its partners to allow them to take their services online by provides technology known as the Ocado Smart Platform, an automated system for packing orders in warehouses, which is operated by robots.
Ocado recently warned that investment in the new warehouses and technology behind its automated systems will hit earnings this year, with spending set to surge to £210m.
Shares in the group rose 4% after the trading update.
It has been catapulted into the FTSE 100 Index for the first time recently following a share surge on the back of its international deal success. This has sparked bumper payouts for its bosses, with the group revealing in July that Mr Steiner and other senior executives will share an extra £9m in bonuses thanks to the share price jump.