Ocado confident despite red figures

Online supermarket Ocado managed to attract more customers in 2022, but they bought less: as a result, losses increased. The company does see growth in the sale of technology solutions to other retailers.

Price-conscious shoppers

Ocado is an e-commerce pioneer in the food sector, making its results somewhat of a gauge of online evolutions in FMCG. And they turned out to be not so positive. After the boom for online shopping during the pandemic, the market is experiencing a decline. In the UK, the web supermarket saw sales of its retail division – in joint venture with Marks & Spencer – fall by 3.8% to 2.20 billion pounds (2.5 billion euros) last year.

However, Ocado managed to attract 13% more active customers, but they put fewer products in their virtual basket and they also used more discount vouchers, causing average spending per purchase to fall from 129 pound in 2021 to 118 pound (134 euros) in 2022. The web supermarket’s online market share increased by six basis points to 12.3%. The company calls the results “encouraging”.

New partnerships

But Ocado also has another business: it develops highly innovative robotic distribution centres, which it sells to retail partners worldwide. That ‘International Solutions’ division saw sales rise 26.5% to 181 million pound (206 million euros). It built 12 new distribution centres – including for Kroger in the US – and signed two new partnerships: with Auchan in Poland and with Lotte in South Korea. According to Ocado, there are quite a few more in the pipeline.

All that notwithstanding, losses reached 500 million pound (569 million euros) in 2022. This year, Ocado expects sales growth of 4-5% for the retail division and of some 40% for the technology division.