(Alliance News) - Ocado Group PLC on Thursday said it has had to take a number of actions, including closing its website, as people turn to online shopping amid the Covid-19 pandemic.
In the 13 weeks to March 1, Ocado Retail, the online supermarket's joint venture with Marks & Spencer Group PLC, delivered 10% retail revenue growth to GBP441.2 million, meeting expectations.
Average orders per week rose 10% to 343,000 and the average order size was 0.3% higher at GBP110.24.
Since late February, however, there has been a surge in demand and an increased basket size as customers change shopping habits amid Covid-19.
To cope with the demand, Ocado has had to take a number of measures including stopping registration for new customers, installing queueing on the website, and closing temporarily its mobile phone app.
Ocado has now also had to close down the website as of late Wednesday, with all delivery capacity for the coming days now sold.
Guidance for Ocado Retail in the firm's year ending December 1 is unchanged at retail revenue growth of 10% to 15%. However, Ocado has assumed a lot of forward buying has occurred and that "there may be further disruptions ahead".
Melanie Smith, the chief executive of Ocado Retail, said: "We have reported continuing growth at Ocado Retail with sales up 10% over the quarter. The impact of higher basket values and order demand, amid growing public concern over the coronavirus, was limited in the quarter, although this has since picked up significantly and growth in the second quarter is so far double that of the first quarter. We expect the impact of forward buying, however, to unwind at some point.
"However coronavirus unfolds, what is clear is that the fundamentals at Ocado Retail are strong, illustrated by double-digit increases in customer orders, driven by consistent execution, which deliver a best-in-market customer experience."
"Preparations for the M&S switchover from Waitrose, this September, are on track, and we are looking forward to building closer and stronger relationships with our branded suppliers as part of the transition," she added.
Shares were 4.8% lower on Thursday morning in London in early trade at 1,409.00 pence each.
By George Collard; georgecollard@alliancenews.com
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