Ocado faces £1.5m hit to profits following ‘beast from the east’

Ocado faces £1.5m hit to profits following ‘beast from the east’

Online grocer Ocado (LON: OCDO) faced a £1.5 million dent in profits after the group was forced to cancel orders during “the Beast from the East”.

With heavy snow and winter storms, depots in Oxford, Kent and Bristol were forced to accept fewer deliveries in the “most trying conditions”.

The weather led to the group having to lose tens of thousands of orders and give undelivered food to food banks, leading to the grocer losing one percent in sales.

“I’ve never seen weather like this in the time I’ve been at Ocado but despite that, we delivered to 296,000 customers in pretty extreme conditions,” said Duncan Tatton-Brown, Ocado’s finance director.

Not only did Ocado’s profits suffer from the extreme conditions seen in the UK, but the quarter’s results also took a hit from the increase in costs.

Ocado reported a rise in retail revenues by 11.7 percent to £363.4 million for the first quarter to March 4. The snowy conditions and storms took off one percent of profits in the final week.

The average orders per week increased by 11.1 percent to 280,000.

“We operated at maximum capacity for most of the quarter and were impacted by the winter storms that caused widespread disruption during the final week,” said the chief executive, Tim Steiner.

“I would like to take this opportunity to thank all my colleagues who nonetheless succeeded in delivering nearly 300,000 orders over the last week of the quarter, often in the most trying conditions.”

The group still managed to meet expectations, with Steiner highlighting the group would have succeeded them if it was not for the week of bad weather.

Ocado recently signed a deal with Canadian retailer Sobeys, as the group expands into North America. The group is also working with Groupe Casino (FRA: CAJ), the supermarket giant based in France.