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Ragge, you could always do your own research:
https://www.ocado.com/webshop/startWebshop.do
US Yields dropping, OIl price dropping, Fed update next week, analyst saying no recession but a slowing of economy, this is our first full year back with out lockdowns from Covid and earnings may surprise across the board, good example take a look at TRN (trainline) their earnings report RNS today.
I still am complimentary of Ocados offering in general. It's Achilles heel though is price. In times of an acute cost of living crisis then Ocados prices looks out of step and causes shoppers to switch to other providers etc.
I sold out due to the chronic headwinds facing this company. Very happy to be on the sidelines in cash currently.
You were always very complimentary of Ocado’s offering. The customer service and quality etc. Thats when the going was good!
Now the share price has took a bit of a tumble you don’t seem to be saying too many positive things. That’s all I’m stating.
I’m sure once the share price starts to climb the positive feedback will come through once again!
P.s Ocado Strawberries all day long. Well worth the extra 36p. Also less risk of them not turning up or being substituted
That's your view Ragge, obviously you don't like to hear any negative views on Ocado. I will refrain from being derogatory towards yourself. I'm simply being realistic.
For example Asda strawberries, available online are £2.89 for 600g, Ocado own brand strawberries are £3.25 for 600g. The Asda ones get better reviews than the Ocado ones online. I have both in my house at the moment. The Asda ones are better currently I'd say. This pattern is replicated across a range of goods where Ocado products are priced higher for a product that is very similar or not as good versus a cheaper one at other online supermarkets. It's little wonder consumers are trading down and switching to other suppliers in this huge cost of living crisis. Wealthy consumers are less effected by the cost of living crunch however they instinctively know how to buy the best product from the best place. They will, and have been, switching if Ocados prices are too high..
Valueplay
I find it hard reading your posts these days. Very very negative. Repeating the same sentences. Sound a bit like Boris when he waffles about his ‘achievements’ through Covid etc etc. Its just repetitive dribble.
‘Ocado goods are currently at a far higher price than its competitors’
Could we have a few examples of this far higher price please?
Also Ocado Retail are still growing.. maybe not as fast as they were but they are still growing. So it’s not all doom and gloom as you make out.
Look at the bigger picture guys. The future is bright
Chilting,
"Its the partnership with M&S that will pull Ocado Retail through the current financial crisis.
M&S customers don't need to watch the pennies"
Strongly disagree with the above. Ocado retail have already reduced sales twice this year, every indication they will do so again this year. Ocado and MKS were perfectly positioned in the pandemic when customers were buying up luxuries as they were saving cash in the pandemic. Now though the situation has reversed and the basic cost of living is shooting far higher. I am personally a longstanding Ocado retail customer with no need to watch the pennies however Ocado goods are currently often at a far higher price than their competitors so I have switched from being an Ocado only customer to using a mix of other online grocers for our household. I expect many, many others are doing the same. The twice reduced sales forecasts for Ocado retail this year underlines this trend..
Its the partnership with M&S that will pull Ocado Retail through the current financial crisis.
M&S customers don't need to watch the pennies.
Sure sales may dip a bit in the short term but this is a long term investment.
Both partners are fully committed to grow Ocado Retail, just as Kroger are committed to growth in the US and other partners are around the globe.
As an investor you have to look ahead and not be sidetracked by the short term.
Interesting comments as always edtheeuph,
"I don't expect to see much of a shift from existing customers away, it's too good a service."
I disagree strongly with your above statement. Ocado retail has already reduced it's sales guidance twice this year. Personally I believe another lowering is on the way..
And regarding customers drying up due to macroeconomics... I think quite the opposite. Grocery companies are having to plan even more meticulously to ensure they provide a future proof offering that is profitable. I've seen announcements over the last year from the existing customers like Kroger and Aeon who keep expanding their CFC and in-store fulfillment sites powered by Ocado, which they wouldn't be doing if it didn't make economic sense, and which Ocado wouldn't agree to build if they didn't expect the revenue to be returned from the investment of building them. Other countries big players will surely follow, and even if there's a slight pause whilst the current macro plays out and they are cautious.. they will be back. And if the grocery market gets saturated, Ocado can just simply branch out into other logistics areas. (And other emerging tech like autonomous vehicles, vertical farming etc etc are also wise moves to enter future markets)
I have to disagree hedged. I invested here because I'm an Ocado customer. The cost of fuel and time saved for me mean getting my shop online is still the better option. My 'belt tightening' financially is in reducing journeys in the car where possible and staying at home, where my enjoyment of food is alas, another reason for my belt physically tightening... Obviously there are others that need to penny pinch even more, whose time/money weighting means they have to plump for limited choice at Lidl/Aldi and half hour spent in a queue, but I believe the vast majority of Ocado customers value the ability to complete their shopping in 10mins from the comfort of bed, then an extra hour enjoying time with family/getting fulfillment from hobbies is much more valuable than an expensive trip in the car to trudge round a physical store. I grew up on a council estate eating cheap tinned food on toast, and worked bloody hard to get out of there and be able to afford 'nice' food, so it's one of the last things I will give up. It's all about target demographics perhaps... But I don't expect to see much of a shift from existing customers away, it's too good a service. On top of that I'm also professionally an engineer... So I appreciate the technology offering from Ocado as genuinely exciting with massive potential. I think sometimes the focus on this board tends to be purely on market manipulation and trends... If you look beneath the surface, there's so much potential in this stock!
Hedged..
Are you just looking at the UK market when you refer to consumer shopping? Are you basing the drop on ORL or Ocado solutions? What price are you expecting Ocado to drop to?
I hope it goes down. I'm short Ocado and have been for while.
There is no doubt this will fall for a number of reasons, both macro and micro. Consumers would rather shop in store rather than on-line. Shoppers are tightening their belts and spending less. Shoppers are choosing lower cost outlets rather than their traditional outlets.
Potential future problems: supply chain issues result in food shortages and lower revenues for supermarkets. Unemployment will rise which will impact all sectors, including retail.
I'm not hoping the Ocado share price goes down. There's no hope, it's merely my prediction.
It's my belief that the share price will continue to fall. There will be a point at which the current macroeconomic environment is factored in. At that point it will become attractive again like any other company. Still falls to go imo.
" A the price goes lower I may well buy back in. For now though there's too many issues forcing this stock down"
Valueplay
Are you hoping the price will go down ....but somehow all the issues you keeping mentioning will have improved at that lower price and the potential customers will have re-appeared ?
What conditions are you expecting ...if the price goes lower ??
Simply wanted to make it clear that I believe Ocado are still evolving
It's those enormous economic headwinds that will continue to do great damage to the company..
" I've never said Ocado are "standing still". "
I never said you did ..so why do you feel you have to say that ???
Pokerchips,
I've never said Ocado are "standing still". They are an extremely innovative company, always trying to evolve. I do firmly believe that the list of potential new clients is drying up significantly due to the current extreme macroeconomic environment. This is just at a time when Ocados costs are rising rapidly and Ocado retail sale are consistently falling.
The new 600 Ocado bot is great. Other companies have also evolved though. There have been no new clients for this technology yet, apart from existing client Auchun ordering an extra CFC.
With Ocado retail UK sales sliding, (there have been two lowering of guidances so far this year) it's unsurprising that other grocers do not want to dive in with Ocados tech currently when demand is falling across the globe
Valueplay
Despite the macro problems right now companies are not just standing still.....you have to keep focused on the future and where you need to be mid-term..... in order to be in a competitive position in an ever changing world
Across many sectors right now I suspect there is a lot of relationship building going on, and negotiations etc ...the end result I suspect will come at some point ....
Personally i doubt that potential clients have been "lost" ...things are more on "pause" than anything else .....
Their customers have potential budgets well above "multi-million pounds" and if they have defined CFC''s as part of their future strategy ....I would be surprised if they just abandon that idea, just because of some current headwinds
I would also think that in many cases the potential customer has gone to Ocado to see what they are offering , knowing that they have decided they need CFC within their operation and are therefore looking themselves at options available to them
The new bot 600 framework set up can be fitted and tested within 5 months, rather than the previous 10 and can be adapted for an existing warehouse
Ocado are most likely losing potential new clients and potential new warehouses also. Ocado haven't signed a new client so far this year, apart from existing client Auchun ordering an extra CFC in Poland.
In current times justifying multi million spends on a new Ocado cfc tie up is become a much harder sell.
OWLS,
I have posted far less than when I held this stock. I've stated many times before that though I am not now invested I am still interested in Ocado. A the price goes lower I may well buy back in. For now though there's too many issues forcing this stock down. Everything has its price though, value may present itself in time
It's an absolute positive for Ocado that Amz are cancelling their warehouse builds.
This is a great buy today for a 2-5 year hold.
VP, given that you are not invested here, why do you post so much ?
Amazon are cancelling/ delaying new warehouse builds. This trend no doubt is being replicated across the grocery sector. Current acutely averse market conditions causing many large grocers to avoid taking on big new expenses when demand is slowing as a the cost of living bites across the world
The downward trend continuing again for Ocado shares. Imo theres more to go re the drop
" Amazon isn’t happy with the efficiency of its facilities.
there has been so much turnover that Amazon began tracking it weekly and found it loses an estimated 3% of its warehouse workers every seven days. That means the e-commerce powerhouse sifts through its entire supply of warehouse labor every eight months on average. "
https://www.zerohedge.com/markets/amazon-cancels-or-delays-plans-least-16-warehouses-year
" Amazon Robotics was launched a decade ago following the acquisition of robotic order fulfilment company Kiva Systems for $775 million. Since then, Amazon has built thousands of robots, but it has kept them mostly separate from humans until now."
https://www.freightwaves.com/news/what-amazons-first-fully-autonomous-robot-means-for-warehouse-workers