Despite higher sales, the losses of the British online retailer and technology group Ocado have increased significantly over the past year. Investments in technological retail solutions are proving costly.
Increased turnover wiped out by rising costs
Ocado’s group turnover grew by 7.2 % to 2.5 billion pounds (just under three billion euros). The company sells online groceries in the United Kingdom through a joint venture with Marks & Spencer – an activity that boomed during the pandemic – and helps other (foreign) retailers set up and improve their online operations. In the long term, the technology business is expected to be the primary source of growth.
Ocado’s retail turnover increased by 4.6 % to 2.29 billion pounds (2.7 billion euros) in 2021, while income from the international solutions division quadrupled to 66.6 million pounds (80 million euros). Last year, the company opened five new fulfilment centres for overseas customers, including the first two in the United States. Revenue from logistics and other services in the UK increased by 8.6 % to 710.4 million pounds (850 million euros).
Red figures
However, costs increased even more than sales: distribution and administration costs rose by a fifth, as Ocado invested heavily in technological solutions for its retail customers and expanded its support services. Partly because of this, gross operating profit decreased from 73.1 million pounds to 61 million pounds (72 million euros). However, the result was in line with the analyst’s expectations, ShareCast reports.
Ocado ended the year with a pre-tax loss of 176.9 million pounds (210 million euros), more than three times higher than a year earlier. Investors did not appreciate the red figures: on the London stock exchange, the shares of the web supermarket and technology supplier went down considerably.
