Ocado Retail revenue up 52% in Q3

Rachel Sibson
Retail Analyst
@RetailAnalysis

Date : 15 September 2020

Ocado's retail revenue grew by 52% in Q3, for the 13 weeks to 30th August 2020.

Driven by average order size

In Q3, retail sales grew faster in comparison to Q2 due to demand remaining high versus a “seasonally soft” quarter in Q3 2019.

The increase in revenue has been driven by an average order size of £141, up over 30% YoY. Whilst average order size continues to normalise from COVID-19 related peaks, it remains above pre-pandemic levels. It is also driven by delivery revenue, which will have increased significantly. For example, Ocado shoppers are having to pay by slots as the retailer is not allowing shoppers without a delivery pass to get one.

Orders per week have also increased to 345,000 for the quarter, a 9.6% growth compared to Q3 2019. The rise in orders per week has been due to strong demand, a phased reopening of the website to new customers, and normalising of shopping patterns.

In terms of outlook for the remainder of the year, Ocado expects a full year EBITDA result of at least £40m for Ocado Group.

Switchover to M&S products

Ocado said that the switchover from Waitrose to M&S products on 1st September has received positive response from customers. According to the retailer, the weighting of M&S products in the average Ocado basket is higher than Waitrose compared to before the switchover. Ocado also stated that excitement from the launch of M&S products has increased the average basket by around five items. 98% of Ocado customers are shopping M&S items.

Melanie Smith, Ocado Retail’s Chief Executive Officer, said:

“Our model brings customers the very best customer experience, supported by sustainable economics and respect for the environment and the communities we serve. Ocado’s innovative technology solution provides the best service metrics for any online grocery service in the UK. We believe that our proposition is the lowest carbon footprint way to shop in terms of emissions and food waste, with increased hygiene meaning less handling of product in our fulfilment and delivery.”

 

For more information on Ocado, read our Ocado Strategic Outlook and to help you prepare for the new normal, read Post-Coronavirus (COVID-19): the longer-term impact and the new normal for ecommerce.