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Casapinos,
I see Ocado raising more funding around middle 2023. That date could becoming nearer though as Ocado retails EBITDA falls and the retail environment be ones evermore challenging.
Fitch ratings amongst others also see a cash call from Ocado coming next year..
https://www.fitchratings.com/research/corporate-finance/fitch-affirms-ocado-at-b-outlook-stable-02-12-2020
Valuplay,
" Trade and other receivables increased by £119.6 million to £324.4 million driven by a growth in prepayments
relating to a number of initiatives relating to the manufacture of capital assets such as advance payments, prepayments for long lead items and a virtual warehouse to hold some assets prior to delivery to CFCs under construction."
Ocado Zoom isnt their main business venture though
Gorilla, Getir, Deliveroo Hop, Ocado Zoom, Globo, Delivery Hero - yes they are all competing .... like couriers
"That date could becoming nearer though as Ocado retails EBITDA falls and the retail environment be ones evermore challenging."
How about you put some proper figures down instead of all this blah,blah about how bad everything is
You are hardly being an analyst - here now are you ??
Draw up an excel sheet of figures and show this " becoming near" in more factual terms
That's your view. I believe them to be a lot more of a threat than just couriers. They've raised huge amounts of capital from investors who see the profitable path for the ahead.
The articles I attached outline things in more detail
Poker,
Ocado cash call mid 2023 is my view, see Fitch article also. Needing more cash is ok but there's a lot of pressure, as costs are currently rising greatly, on obtaining new contracts to show more light at the end of the tunnel.
Those big new contracts may come, we will see in time.
I suggest you invest in them -- head over to Deliveroo
" They've raised huge amounts of capital from investors who see the profitable path for the ahead. "
I am sure on a global expansion of that kind of model .....and eventually some consolidation probably ..
Meanwhile..... I will keep my eye on the price drops of those Ocado Convertible Bonds which have fallen during the tech sell off.and Ocado "scare" stories ....and no doubt some dubious parts of the market will want them down as low as possible to scoop them up cheaply ...
valueplay
I have no doubts that contracts for the new 600 Bots will come - no doubts
Just have to be patient...
The articles I attached outline things in more detail
“The 15-minute delivery model requires a fundamentally different operating model and infrastructure to what Ocado has today, so they are quite simply not placed to compete, even if they wanted to,” says Simon Geale, executive VP of supply chain consultancy Proxima.
enough said ... end of
Value I think you misunderstand the Fitch reference you offer. First Fitch are a credit rating agency and their job is to rate businesses for the credit rating that should be applied to their borrowings, the article you quote which is from DEC 2020 is entirely positive , it raises OCDO's credit rating,(which effectively lowers the interest rate at which they can borrow)and implies they will need no further cash until 2023 and further suggests that the credit markets will be entirely happy to provide that cash .
I'm raising the issue that they are a significant threat and a lot more than just couriers. Not saying they are sure fire winners. Ocado may well adapt to see off the threat.
We will see in the coming months..
Contracts for the 600 bots will come through. Question will be though are they of a big enough scale.
Fair enough Poker, I could easily quote the opposite argument in a quote from those articles.
We will see, they are more of a threat than most realise I believe.
Valueplay
with respect ....you must be nuts if you see this as a " significant threat " - ..you are talking about a threat to Ocado Zoom.... twiddly dee... Ocado is MUCH MORE than that
“The 15-minute delivery model requires a fundamentally different operating model and infrastructure to what Ocado has today, so they are quite simply not placed to compete, even if they wanted to,” says Simon Geale, executive VP of supply chain consultancy Proxima.
Fitch outline that new funding will be needed in 2023. Credit markets have deteriorated greatly since then and in all probability will do so more in the coming months. Ocado may well choose to raise cash from shareholders in its next fundraise.
JP Morgan for example as below, they are not nuts...
"Overall, we feel even more assured of our view that: 1) major changes are about to come in regards to consumer grocery shopping patterns; 2) ultrafast delivery is a scale game and the unit economics for the new players do work and can achieve 10-15%+ contribution margin long term with operations also being successful in less urban areas and 3) ultrafast online grocery could become the third significant disruption for grocers since 2008"
" ultrafast delivery is a scale game and the unit economics for the new players do work and can achieve 10-15%+ contribution margin long term"
LONG Term ... SCALE game ....
Its a different market and the big supermarkets will happily let the start-ups try things out ...the big boys tend to watch and learn the market and then strike a competitive Offer once they have their model and the market fully figured out .. I wouldn't write off the likes of Ocado Zoom or others just because some start-ups have started growing the market
There is a demand for quick deliveries .... but its a different model and warehousing system ..at least at present
I think the ultra fast delivery model could burn out.
It is so dependent on a cheap pool of labour and as competition grows prices are bound to become more competitive for the service offered but at the same time delivery drivers will want more wages or they will move to a competitor.
Also regulation hasn't really caught up with the industry yet - that's bound to push up prices when it does.
I'm not writing off Ocado retail. Simply saying that ultra fast grocery retailers represent a threat to their current overall market share. Consumers increasingly are wanting small quick baskets of goods. The ultra fast delivery outfits will evolve quickly and become more nimble after the job of building out their network is done.
I also saw a Getir delivery with 3 x 6 packs of Coke - gee wizz ..whoopie doo...
So good to know our nation has a back up ready to feed the nation of 60m - I am sure Tesco are trembling
Tesco were concerned and to combat the threat they signed a partnership with gorillas in Oct 2021:
https://news.sky.com/story/tesco-and-gorillas-partner-for-rapid-grocery-deliveries-12453467
" Tesco were concerned and to combat the threat "
you certainly are amusing - I will give you that
They are merely adding a delivery option .like WHSmith added Deliveroo .... but to see it as a threat to their business ..is pushing it...
As Pokerchips says: There is a demand for quick deliveries .... but it's a different model and warehousing system …..
As I understand it, Deliveroo, and other similar offerings, are effectively a courier service from a local store (or fast food outlet) to your door - there’s no warehousing involved is there? I understood that Aldi discovered that it wasn’t worth pursuing it and that ‘click and collect’ was perfectly adequate for their business. A local supermarket is organised for public browsing, trolley filling and checkout - not high storage volumes, fast selection and despatch. They don’t have the manpower to do it at scale, the aisles are arranged for display and have to be restocked manually.
https://www.thegrocer.co.uk/aldi/aldi-ditches-deliveroo-as-more-normal-shopping-patterns-drive-down-demand/663682.article
OCDO is a different offering requiring a more efficient logistical system which offers a very wide choice and, typically, delivery of a weekly family shopping order. Corner shops and small stores have survived alongside super stores so there's clearly room for both models.
They are responding to a threat by using other companies experience/ tech to combat others in that ultra fast delivery space. They have also recently signed a partnership with Uber eats to expand delivery to 600 stores. They clearly see the ultra fast delivery proposition as one that customers are demanding increasingly.
Tesco tried to launch their own ultra fast delivery service, it failed so they partnered with others.
Bayobach,
The ultra fast delivery model is continually evolving at a fast rate. Most ultra fast delivery models are utilising dark micro warehousing and will do so more, along with more use of tech, as their contracts increase along with their network.
It's a threat to Ocado and all the other grocers. Grocers are combatting the threat in different ways but the great majority are choosing to fight back in the space rather than ignore the new business opportunity.
The UK grocery market sales are over £200 billion a year....when your ultra fast 10 minute e-bike scooters take even 1.7% of it for delivery we can celebrate their enormous threat
" Venture capitalists poured $9.7 billion into rapid-delivery companies globally in 2021, according to PitchBook. A few months into 2022, that optimism seems like a distant memory."
https://www.bloomberg.com/news/articles/2022-04-08/15-minute-grocery-delivery-services-hit-reality
" Gorillas plans to lay off 300 people, cutting its administrative staff numbers in half, as the German grocery delivery app shifts its focus from rapid expansion to turning a profit."
https://www.thetimes.co.uk/article/grocery-deliveries-profit-motive-takes-over-as-gorillas-lays-off-300-staff-0m7s8rgzz