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(Alliance News) - Online supermarket Ocado Group PLC on Thursday said that joint venture Ocado Retail Ltd saw "exceptional" demand in the fourth quarter of its financial year, leading to a 35% rise in revenue.
Ocado Retail is an equal joint venture between Hatfield, Hertfordshire-based Ocado Group and London-based food, clothing and homewares retailer Marks & Spencer Group PLC.
In the 13 weeks to November 29, Ocado Retail reported revenue of GBP579.6 million, up 35% from the prior year's GBP429.7 million.
Average orders per week increased 3.0% to 360,000 from 350,000.
Of this, 130,000 orders per week were filled by the relatively new Erith customer fulfilment centre. Average order size was GBP133.
Ocado said customers are buying the full M&S range, with the biggest sellers coming from everyday essentials in the M&S fresh categories.
For the financial year that ended November 30, Ocado Group now expects to report earnings before interest, tax, depreciation and amortisation of over GBP70 million, up from GBP43.3 million a year prior. It said growth in financial 2021 will be determined by the extent to which Ocado Retail returns to a "normalised" trading week and the timing of additional capacity going live.
Ocado Retail Chief Executive Melanie Smith said: "Despite exceptional demand during the period, we have high rates of on-time customer delivery and low rates of substitutions. This, together with our commitment to competitive prices and the freshest produce available, all delivered in a way that minimises handling and maximises hygiene, has strengthened our credentials as the UK online grocery market leader in terms of customer experience. With three new warehouses opening in 2021 which will ultimately give us 40% more capacity to our business, we look forward to being able to offer more slots to existing customers while welcoming new customers to Ocado and showing them what we can offer."
Added Chair Tim Steiner: "We enter the holiday period with confidence and look ahead to better times for all in 2021."
Ocado shares were down 5.2% at 2,206.29 pence each in London on Thursday morning, though the stock remains up 73% so far in 2020. M&S shares were down 4.2% at 137.05p and are down 36% in the year to date.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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