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The current macroeconomic environment is known. Many in the market are hoping for it to improve, I do not believe that will happen in the short/ medium term. Thus shares will fall further.

Many commodity prices are falling as the likelihood of a global recession further increases.

Cheers oceanfruit, Carrington, best of luck

Carrington,

There were in my view a number of red flags around the recent share placement imo as I raised in previous posts. It was at a large discount to the share price, 9%.

Plenty of downwards moves to come for this share. Last Friday Goldman Sachs downgraded Marks and Spencers to a sell. As further downgrades to Ocado retail figures, guidance has already been reduced twice this year by Ocado retail management, occur over the coming year I see further downgrades for both MKS and Ocado occuring.

We differ in opinion, the market will show whose vision is more correct. I believe the macroeconomic environment will further worsen driving this stock down more. Happy to watch this happen from the sidelines.

Lol Pokerchips,

Such strong competition in grocery currently. Many see Ocado retail continuing to shed customers during this cost of living crisis...

https://www.telegraph.co.uk/business/2022/06/22/pricey-ocado-going-crushed-aldi-lidl/

Some Ocado customers will be shopping more at Lidl and Aldi currently but those two have limited online delivery options. The bigger destination for those customers currently leaving Ocado will be the main grocers with solid online delivery options, Tesco/Asda/Sainsburys.

The chance of a general election this year is very remote which is why the markets have barely moved today. New Tory prime minister will take over after Tory leadership contest and follow similar economic policies to Boris imo..

In normal circumstances retail is about much more than price. Currently though the spotlight is very firmly focussed on price due to the huge cost of living crisis. It's a crisis that has been rarely seen in the UK in recent years.

It's the misstep on price that's causing Ocado retail to lose sales month after month this year. It's a big part of the reason Ocado raised funds imo. Due to the repetitively falling sales at Ocado retail.

The 36p difference in the strawberries prices I highlighted shows the overall issue. Ocado is often 12% priced above competitors for similar goods (as in the strawberry comparison)

Ordinarily this is not so much of an issue because Ocado stock a greater range, have better customer service, less substitutions. However currently consumers are laser focussed on the price of goods versus all other issues. In the pandemic people were cash rich, treating themselves to a host of luxuries to cheer themselves up. Now though consumers will happily pay 12% less for their online grocery shop even though there's less range and there may be more subs..

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.

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..

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..

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..

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.

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..

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

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

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

@pokerchips,

A takeover of Ocado in the current economic climate is highly improbable imo. There have been no new customers to Ocado solutions this year apart from the existing Auchan partnership expanding by one CFC in Poland.

This market downtown is sharp and based on solid negative factors that have been previously discussed here. It's not just some Americans trying to short UK plc. It's very understandable though to short UK plc, it is very weak currently and will become more so...

For me current macroeconomic conditions, to the great detriment of Ocado, are worsening. Nows the time to be out of this stock ahead of further falls.

As always best of luck with your investments.

Chilting,

My reason for selling was purely derived from the extreme nature of the macroeconomic headwinds facing Ocado currently. These conditions are worsening and Ocado is not a stock to be invested in currently. Repetitively falling Ocado retail sales. No new customers since the reimagined presentation. Fundraising occuring extremely early at a very low price indicating costs are rapidly escalating at Ocado group.

Investing in Ocado has been very lucrative for me but currently the best place to be is out of this share imo

@chilting

The placing went ahead yes but at a big discount and at a knockdown sp. Indicating the management believe the share price will not rise considerably in the short to medium term. Some of the management team took up shares in the placing, many others didn't.

Dropping sales at Ocado retail and rising costs at Ocado group are obviously sapping finances greatly but these issues were not mentioned in the placing RNS.