Ocado hit by snow and winter storm disruption
The group reported an 11.7% rise in first-quarter retail revenues to £363.4 million, with adverse weather wiping nearly 1% off its sales.
Online grocer Ocado has said its sales were hit by the recent disruption caused by heavy snow and winter storms as it battled to deliver orders in the “most trying conditions”.
The group reported an 11.7% rise in retail revenues to £363.4 million for the first quarter to March 4, with the adverse weather in the final week wiping nearly 1% off its sales.
It comes after sales growth was also held back in the previous three months, when a shortage of drivers saw a slowdown to 11.6% from 13.1% in the third quarter.
Ocado also saw its average order size slip by 0.4% or 40p to £110.45 in the most recent quarter – which included the busy Christmas period – as inflation was offset by customers buying fewer items in each shop.
Average orders per week rose by 11.1% to 280,000, the group added.
Chief executive Tim Steiner said: “We operated at maximum capacity for most of the quarter and were impacted by the winter storms that caused widespread disruption during the final week.
“I would like to take this opportunity to thank all my colleagues who nonetheless succeeded in delivering nearly 300,000 orders over the last week of the quarter, often in the most trying conditions.”
The group also said it was “confident” of sealing more international tie-ups after recently signing a major international partnership and its first foray into North America after reaching a deal with Canadian retailer Sobeys.
It is also working with French supermarket giant Groupe Casino.
Ocado said it was on track to open its fourth and biggest distributon centre in Erith, Kent, in the middle of the year, which will be able to handle an extra 200,000 orders a week.
Shares in Ocado fell more than 1% after its trading update.
George Salmon, an equity analyst at Hargreaves Lansdown, said: “The Beast from the East has done its best to freeze progress this quarter, with disruption from the cold snap seeing the group lose close to £4 million in sales.”
But he said the past few months had been “transformational” for Ocado.
“Underlying progress has been good, but it’s the signing of two agreements to license out its technology to international retailers that has really moved the dial,” he added.