Ocado Group reported accelerating sales growth in the third quarter, with retail revenues up 7.2% versus last year. The improvement comes after +5% growth in the first half.
Today’s numbers will go a long way in increasing sentiment among investors who feared Ocado would suffer as consumers tighten their belts. Ocado shares were 3% higher at the time of writing and were among the FTSE 100’s top risers.
The online grocer also saw a return to positive volume growth in September as the number of items sold increased.
Ocado said its “Perfect Execution Programme” is strengthening its customer proposition. A major price drop campaign was launched in August. On-time delivery rates remained high.
Active customer numbers grew 1.5% to 961,000. Mature customers, who have shopped 5+ times, rose 6.6%. Average order value grew 4.2% and average selling prices increased 8.4%, though still below inflation.
Ocado saw positive momentum heading into Q4 but left full-year guidance unchanged. In Q3, retail revenues hit £569.6 million. Average orders per week reached 381,000, up 1.9%.
The growth comes despite tough comparables after strong customer acquisition last year.
“It has now been a year since I joined Ocado Retail and in January we set out our Perfect Execution strategy, making sure every element of our customer proposition and our operating model is at its best,” said Hannah Gibson, Ocado Retail’s Chief Executive Officer.
“We are delivering on this plan and have great momentum in the business, with revenue growing faster in Q3 than in H1 and a return to positive volume growth in the last month of the quarter. The continued progress in Q3 underpins our confidence in delivering our FY23 guidance of mid-single digit revenue growth and full year profitability, and we have started the final quarter positively.”