Ocado to crash out of Footsie

OCADO is about to be relegated from the FTSE 100 in another blow to the embattled online supermarket.

The London-listed business faces a demotion from the top tier of listed firms next month, according to an advisory note from the London Stock Exchange Group.

The reshuffle – which takes place in June based on the value of stock market companies on Tuesday next week – is expected to see Ocado crash into the FTSE 250.

Although a huge disappointment for the tech business, the relegation will come as a little surprise after Ocado’s annual losses ballooned to half a billion pounds last year while its shares have fallen by more than 35pc so far this year. The company’s stock is more than 85pc lower than its peak during the pandemic. Shares yesterday edged down 0.2pc, or 0.8p, to 402.6p.

Ocado – founded 23 years ago by Jonathan Faiman, Jason Gissing and Tim Steiner – has struggled since shoppers returned to physical stores as well as restaurants and pubs after restrictions imposed during covid ended.

And customers facing rising living costs are adding fewer items to their online baskets. Last year’s loss of £500.8m came on top of a £177m loss a year earlier.

Danni Hewson, head of financial analysis at investment platform AJ Bell, said: ‘Ocado’s fortune looked pretty well set during covid times, when supermarkets rushed to increase their online capacity as worried shoppers spurned the long queues that snaked around car parks at the height of the pandemic.

‘But it grew too far, too fast, and when inflation followed hot on the heels of a return to “normality” it was forced to halt expansion plans and cut costs by closing its oldest warehouse.’