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cheers, i don't *****foot around!

high cash burn and heavy annual losses are a big worry for the market in the higher interest rate world of today. huge issue for ocado is that the new grocery partner contract flow has been very slow since the new reimagined technology was developed. investors are happy to keep financing an operation when new contracts are being signed regularly however of late the contracts have been sp****.

kroger and ocado retail have paused commissioning further cfcs so cash flows to ocado from any new cfcs re these contracts are pushed further into the future.

ocado retail used to provide strong cash flow to the group. currently though ocado retail has 25% spare capacity. grocery prices are being reduced in an effort to drive up customer orders however this impacts their profit margin.

This mornings move was speculation the share had bottomed out, no news backing it up. Back on the downwards trend now. Investors reverting to looking over the recent negative news flow re Ocado and concerned re the groups losses at in a higher inflationary environment.

If inflation remains higher then interest rates do not fall at the same pace as previously thought. Ocado is still posting substantial annual losses. High interest rates means higher financing costs when it asks the markets for cash in the coming years. Ocados profitability would then be delayed further into the future.

Waccybaccy,

I did not bring up this subject in this instance. Was replying to a direct question from Sangijuelas1 if you read the thread...

The spoke Kroger issue is a direct driver of the recent Ocado share price move downwards. Why would you not want to discuss it?

CEO statements are opinion not fact. Need to read between the lines, behind the corporate bluster to ascertain the real situation here.

Fact is Kroger haven't commissioned any new Ocado tech since Sept 2023.

Having consulted Ocado, Kroger thought the costs, performance of Ocados delivery solution would allow them to enter into these new markets. That's been a costly mistake for Kroger and costly to Ocados delivery model reputation.

Sangijuelas1,

Yes, those spokes were part of Kroger's strategy to move into markets across the US in which they had no physical store presence. Those spokes underperformed and are to close. Obvious read across is that Kroger are going to be far more cautious about using Ocados delivery model to push into those markets. Those new markets represented a major opportunity for Kroger and Ocado. There are likely now to be far less spokes built by Kroger, a large potential revenue loss for both Kroger and Ocado. Kroger have had a pause on commissioning further Ocado tech for an extended period now.

Other grocers will be more reticent in using Ocados solutions as a result of its failure re Kroger breaking into new markets.

So many negative factors surrounding Ocado currently. Many jump in without doing any research. Still scope for a further move downwards.

"IMO history always repeats itself"

Most bonkers statement I've seen here....

Logical that Ocado shares are marked down further given the major issues at the company. Huge overcapacity at Ocado retail, issues that will take years to put right delaying Ocado retail profits. Kroger canceling various spoke delivery locations admitting Ocados delivery solution had underperformed. Overall losses at Ocado group ongoing. Slow sign up of new grocers to Ocados new reimagined technology etc.

Morgan Stanley reducing their price target off the back of the news re Ocado chairman stepping down is an obvious move on their part imv. That news could only be interpreted as a negative to add to the numerous other negatives surrounding Ocado shares currently.

Https://www.asktraders.com/analysis/ocado-shares-continue-decline-heres-why/

"Following the news Thursday, analysts at Morgan Stanley cut their price target for Ocado to 345p from 375p, maintaining an Underweight rating on the shares."

"admitted Ocados online grocery delivery solution has had disappointing results in 3 locations regarding breaking into new markets where it does not have physical stores"

Above is amended. It's my quote. The Ocado delivery solution failed to deliver for Kroger in these 3 instances so the facilities are being closed. The spokes delivered in locations where Kroger stores were not present.

"These facilities did not meet the benchmarks we set for success."

Above is a direct quote from Kroger re the 3 cancelled Ocado spokes.

Of the flurry of recent negative news re Ocado the closing of 3 Kroger spokes was the most standout bearish signal. Kroger, Ocados largest partner in the world, admitted Ocados tech has had disappointing results in 3 locations regarding breaking into new markets where it does not have physical stores. The read across is that Kroger will be more cautious in ordering tech and won't use it across such as a large geography as had been previously envisaged.

Meaning slower, less cash flow for Ocado from Kroger. Others will be reticent in becoming an Ocado partner given Kroger are cutting back on Ocado tech.

Further downside for the share price from here imv.

Given the number of negative issues that are occuring currently at Ocado it's little wonder the shorts are increasing their positions.

He's seen a brighter future elsewhere. Given the current issues facing Ocado it's a logical excellent move for him to jump ship. Personally I think it's a very fair assumption that he sees the probability of huge new contracts for Ocado as low. The market also is interpreting the news this way in marking Ocado shares down against the backdrop of a strong FTSE today.

He thinks about his pay for sure. If he knew upcoming large new contracts to be signed by Ocado then he would be motivated to stay. Share options etc would rack up immensely if Ocados share price rose sharply from here. As said it's not a big negative sign but it adds to the cluster of negatives surrounding Ocado currently.

Fair enough re your views both however the chairman imv wouldn't be leaving if he knew big new contracts were upcoming. The market feels the same hence the knock back to shares today. It isn't a major negative. It is though a negative to add to the M&S potential law suit and underperformance of Ocado retail, the closing of spoke sites by Kroger, the continued high level of losses etc etc

Chairman deciding to step down is the latest sell sign regarding Ocado shares. It adds to a long list of issues. Clearly the chairman does not see a great reversal of fortune for Ocado on the horizon.