Ocado crashes as sales set for first ever fall

OCADO shares crashed after it warned that it will suffer its first ever fall in annual sales.

The retailer, half owned by Marks & Spencer, said customers are cutting their basket sizes and switching to cheaper products as the soaring cost of living bites.

And the online supermarket warned profit would suffer because of the rising price of fuel and dry ice – used to keep groceries cool – which could lead to a £45m hit.

Shares fell 14.6pc, or 116p, to 679.2p. M&S, whose products account for around a third of sales at Ocado retail, suffered a slide in shares of 3.8pc, or 4.8p, to 121.9p.

Ocado shares are worth less than a quarter of their pandemic-fuelled highs. It has continuously increased sales as online supermarket shopping gains popularity, and a surge in demand during lockdowns saw shares soar, briefly topping £28.

Since lockdowns ended, demand for online shopping has eased. Meanwhile, questions have persisted about the value of Ocado’s automated warehouse technology.

Ocado, whose chief executive is Tim Steiner, who is in a relationship with Polish model Patrycja Pyka, said sales in the three months to August 28 rose 2.7pc to £532m, driven by a record number of customers.

The increase came in spite of the average order shrinking by 6pc to £116, compared with £123 a year earlier. And figures from data firm Kantar laid bare the impact of rising living costs on some supermarkets.

Waitrose sales tumbled in the three months to September 4. But sales at Aldi jumped 18.7pc, helping it climb above Morrisons to become the UK’s fourth biggest supermarket. lidl was the fastest-growing with sales jumping 20.9pc in the period.

AJ Bell investment director russ Mould said Aldi joining the Big Four felt like a ‘symbolic moment’.