Britain’s Ocado sees retail sales soar 27% in lockdown half

Ocado, the British online supermarket and technology group, said it was confident that the surge in online grocery shopping due to the coronavirus pandemic will continue as it reported a 27.2% jump in first half retail sales.

Industry data shows online penetration of the British grocery market has almost doubled in recent months to 13% from 7% before the pandemic. Globally, online grocery penetration is currently low, with significant scope for expansion.

Ocado said on Tuesday retail revenue for the 26 weeks to May 31 was 1.02 billion pounds ($1.28 billion), up from 803.2 million pounds in the same period last year, boosted by the UK being on lockdown for nearly all of its second quarter which drove unprecedented demand.

«As a result of COVID-19 we have seen years of growth in the online grocery market condensed into a matter of months; and we won’t be going back,» said Chief Executive Tim Steiner.

«We are confident that accelerated growth in the online channel will continue, leading to a permanent redrawing of the landscape of the grocery industry worldwide.»

Ocado said fees invoiced to overseas technology partners rose 58.2% to 73.7 million pounds as its international roll-out gained pace with the opening of the its first robotic distribution warehouses for Casino in Paris and Sobeys in Toronto.

However, the group’s core earnings, or EBITDA, fell 36% to 19.8 million pounds, reflecting increased costs from investment in the technology business. A loss before tax of 40.6 million pounds also reflected this investment.

Ocado, which last month raised 1 billion pounds ($1.25 billion) through an equity and bond issue, said there was no material change to its forecasts from previous statements. ($1 = 0.7970 pounds)

Reuters