Ocado sales rising as supermarket price wars intensify
Online grocer Ocado has seen its sales grow in a market gripped by a fierce supermarket price war.
It posted a better-than-expected 15.3% hike in gross retail sales to £252m in the 12 weeks to August 9 compared with a year ago, as trading showed steady progress. Shares lifted by almost 5%.
However, Ocado's sales growth has eased back from the 16.2% rise seen in the previous three months. Ocado also said its average basket size fell 1.1% to £110.46 compared to a year ago - its sixth quarterly fall in a row.
Prices are falling year-on-year in the grocery industry as the Big Four players slash prices to compete with discounters such as Aldi and Lidl.
Ocado chief executive Tim Steiner said: "We are pleased with the continued steady growth of our business in a retail environment that remains tough."
Mr Steiner said the business would continue to improve its IT infrastructure, adding: "Notwithstanding the competitive nature of the marketplace, we expect to continue growing slightly ahead of the online grocery market."
But analysts at HSBC said: "The ongoing price competition in the wider grocery sector in the UK is having an impact on Ocado, especially on its Low Price Promise - cheaper than Tesco - matched products."
Shore Capital experts said the company was suffering "basket erosion".