Ocado has sizable operational profit

Ocado has sizable operational profit

British online food distributor Ocado has reported a 79 % profit increase in its first semester thanks to a successful Morrisons collaboration. To achieve further growth, Ocado is contemplating international expansion.

Further expansion in United Kingdom

It still is highly unlikely that Ocada will have profitable full-year results, despite these excellent half-year results, for the first time ever in its 14-years existence as the company has announced to invest in a third distribution center allegedly worth 250 million euro.

 

Ocado also aims to invest another 100 million pounds (125 million euro) in the next three years to further expand its UK operations. It will not only build a new customer fulfillment center, but also expand the current Dordon center.

 

Morrisons investments

Its operational result in the 24 weeks leading up to 18 May 2014 prove that these investments are solid as its 7.5 million pound profit (9.4 million euro) is a sizable increase compared to 2013's first semester with its 1 million pound (1.25 million euro) operational loss.

 

Ocado revealed a 2013 loss of 12.5 million pound (15.6 million euro) loss in February, while 2012 had almost been a profitable year with a mere 0.6 million pound (750,000 euro) loss. Back in 2013, the company had invested quite a lot in capacity-increasing measures, mostly to get the Morrisons collaboration going. Morrisons was the only one of the four major British supermarket groups that still had to launch its online project.

 

More turnover, more products

The collaboration started on 10 January 2014 and has resulted in a 15.6 % turnover growth in the first half of the year, reaching 442.4 million pounds (552 million euro). It has also expanded its product range from 31,000 in 2013 to 35,000 now, on top of a new animal food and accessories web shop carrying 8,000 products. In the second part of 2014, Ocado intends to open a special web shop for grocery products as well.

 

"The online grocery market continued to outperform the traditional bricks and mortar supermarkets, Ocado CEO Tim Steiner said, even though he realizes that the online growth is under pressure. "The overall rate of growth [is] currently impacted by subdued and cautious consumer spending. At the same time, Ocado outperformed its key online grocery competitors."

 

Steiner has even suggested the Ocado system could be expanded internationally. The successful launch of Morrisons.com was particularly encouraging and paves the way for future agreements to commercialise the value of our intellectual property. We continue to invest to take advantage of partnership opportunities in the future as the demand for online grocery shopping increases internationally."

Questions or comments? Please feel free to contact the editors


Amazon prepares own sports clothing collection

17/10/2017

Amazon is allegedly working on its own collections of sports clothing, having contacted manufacturers working for chains like Gap and Uniqlo. These are currently only producing small numbers of clothing.

H&M invests in old clothing recycling

12/10/2017

Swedish H&M acquired a minority stake in Re:newcell, which focuses on a sustainable fashion industry and targets the recycling of old clothing.

Uniqlo's profit more than doubled

12/10/2017

In the past fiscal year, Japanese Uniqlo more than doubled its profit on the back of a 4 % turnover increase. The fashion chain forecasts international sales to soon outgrow those of Japan.

Gucci also halts fur production

12/10/2017

Fashion brand Gucci will no longer use fur in its clothing and accessories, as CEO Marco Bizzarri promised during his Kering Award for sustainable fashion acceptance speech for the London College of Fashion.

Fashion platform About You launches in the Netherlands and Belgium

11/10/2017

German fashion web shop About You, the second largest online European fashion retailer, officially launched in Belgium and the Netherlands following an unofficial launch in the Netherlands some time ago.

Luxury group LVMH exceeds third quarter expectations

10/10/2017

French luxury group LVMH has surpassed turnover expectations in the first three months of its fiscal year. Louis Vuitton and Christian Dior’s parent company managed a 12 % like-for-like turnover growth, to 30.1 billion euro.

Back to top