Ocado Retail revenue up 35% in Q4

Date : 10 December 2020

Rachel Sibson

Retail Analyst

Ocado Retail has announced an increase in revenue of 35% to £579.6m in its fourth quarter, 13 weeks to 29th November 2020.

Strong demand for online grocery

The increase in revenue has been driven by the strong demand for online grocery, as well as the continuation of a smoothed trading week. This is due to more consistent and stable order levels throughout the week, in comparison to the peaks and troughs in demand pre-COVID.

Ocado’s average orders per week were up 3% to 360,000. The Q4 results indicate shoppers’ behaviour is continuing to normalise from COVID-19 related peaks. Ocado said the average order size was £133 in Q4, down from £141 in Q3 and £137 in H1. 

Ocado also said its customers are continuing to embrace the addition of the M&S range, with the biggest selling lines coming from everyday essentials in the M&S fresh categories.

Forward outlook

Full year EBITDA is expected to be over £70m. Ocado said its rates of sales and EBITDA growth in FY21 will be determined by the extent to which Ocado Retail will return to a “normalised” trading week and the timing of plans for additional capacity.

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

“Despite exceptional demand during the period, we have high rates of on-time customer delivery and low rates of substitutions. This, together with our commitment to competitive prices and the freshest produce available, all delivered in a way that minimises handling and maximises hygiene, has strengthened our credentials as the UK online grocery market leader in terms of customer experience.

With three new warehouses opening in 2021 which will ultimately give us 40% more capacity to our business, we look forward to being able to offer more slots to existing customers while welcoming new customers to Ocado and showing them what we can offer”.

For more information on Ocado, subscribers can 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.