That’s great news for Ocado Retail! 📈 Despite shrinking average order sizes, they managed to achieve positive earnings for the 2023 financial year. 🎉 The increase in selling prices, growing customer numbers, and higher revenues contributed to their success. 👏 The rise in active customers, volumes sold, and average basket value shows that they are attracting and retaining more customers. However, they experienced a slight decrease in average basket size. 📉 Overall, their performance seems promising for the future! 😊
Investors will be glad to see Ocado Retail returning to earnings growth after facing a £4 million loss in the previous financial year. 📉📈 This positive development has led to an increase in Ocado shares by approximately 5.7 percent during early trading. However, it’s worth noting that the shares have experienced a 20 percent decline over the past 12 months. 😕
Ocado’s strategy of focusing on “improving pricing relative to the market” is reflected in their average selling price, which was lower than the inflation rate for the quarter. They aim to provide better value to customers. 👍
As they move forward, Ocado Retail anticipates that revenue growth may be affected by a slower growth rate in average selling price due to their emphasis on investing in value and as food price inflation continues to decrease. This indicates a focus on maintaining competitive prices in the market. ⚖️💰
Despite reporting its highest-ever level of sales during the peak Christmas trading period, with a 7 percent increase between December 20 and 24, Ocado Retail emerged as the worst performer among grocers. 🛒😔 In stark contrast, Marks & Spencer (M&S) experienced soaring sales and emerged as the winner of the festive season.
M&S CEO, Sam Machin, expressed optimism about the potential of the joint venture with Ocado Retail, but acknowledged that it would take at least three years to fully realize its benefits. However, M&S Chairman Archie Norman expressed discontent with the performance of the partnership and emphasized the need for improvement.
The M&S-Ocado joint venture, established in 2019, replaced a previous collaboration between Ocado and Waitrose. M&S reportedly added nearly 600 products to the Ocado website prior to Christmas, which expanded the available range for customers.
While Ocado has made efforts to offer a wide selection of M&S products and ensure efficient delivery, there are concerns about whether the company is meeting the expectations of cost-conscious consumers. Analysts suggest that the projected “mid-high single-digit” overall revenue growth indicates that Ocado Retail may be aware of the challenges it faces.
It’s worth noting that Ocado has two business areas: Ocado Retail and Ocado Solutions. Ocado Solutions focuses on partnering with retailers to enhance their own delivery services using Ocado’s technology.