Online grocer Ocado’s sales grow 15.3% in Q3

BY SYLVIA DE OLIVEIRA Director of Latin America Research

The average order value for online grocer Ocado dipped 1.2%, but average orders per week have jumped 16.6%.

Ocado Group Plc retail sales increased 15.3% in the third quarter to 252 million pounds ($392.3 million) from 218.5 million pounds ($340.1 million) a year ago. But Ocado, the United Kingdom’s largest online-only grocer, reported its average order value shrank slightly. Retail sales include sales at grocer Ocado.com, specialist pet store Fetch.co.uk and housewares retailer Sizzle.co.uk. Ocado Group is No. 19 in the Internet Retailer 2015 Europe 500.

The average order value decreased 1.2% to 110.46 pounds ($151.37) from 111.64 ($152.98) in Q3 last year, Ocado said. The grocer averaged 190,000 orders per week, a 16.6% increase from 163,000 orders per week in the year-ago period, Ocado reported.

Ocado Group total sales increased 17.3% to 272.0 million pounds ($423.8 million) from 231.9 million pounds ($361.3 million) in the year-ago quarter. Group results include sales from the retail group and benefits from an agreement with U.K. grocer Morrisons. In July 2013 Ocado signed a 25-yearagreement with Morrisons that enables the retailer to sell groceries online; Morrisons.com launched in January 2014.

The grocery market in the U.K. continues to experience significant challenges from price competitiveness and deflationary pressures, according to Ocado. “We are pleased with the continued steady growth of our business in a retail environment that remains tough,” CEO Tim Steiner said in Ocado’s statement reporting the quarterly results. “We believe our commitment to improving what we offer to customers through innovation and our proprietary IP will support further growth,” he said, referring to Ocado’s computer and warehouse technology that it hopes to soon license to other large grocers.

“Notwithstanding the competitive nature of the marketplace, we expect to continue growing slightly ahead of the online grocery market,” he said.

In the first half of 2015 more than 50% of orders were placed using a mobile device through Ocado’s apps and browsers, and Ocado created an app for the Apple Watch.