Landscape for shopping is changing says Ocado CEO
Ocado improved its sales by 32.7% over 12 months driven by a mass exodus to online shopping during the pandemic according to the company.
Following a surge in demand for Ocado’s food delivery service, the company also narrowed its losses from £214.5m to £44m.
Despite positive financial results, Ocado’s share price dropped by over 3% on Tuesday’s early morning trade to 2,630p per share.
Ocado’s share price has come under pressure recently over fears of taxes imposed on e-commerce companies that experienced increased demand as a direct result of lockdowns.
Tim Steiner, chief executive of Ocado, put the company’s results down to the pandemic creating demand for the online retailer.
“The rapid acceleration of many pre-existing trends in business and society has been a feature of the Covid-19 crisis and the dramatic channel shift in grocery is a clear example of this,” Steiner said.
Although supermarkets have stayed open throughout the pandemic, many consumers have chosen to get their shopping delivered.
Ross Hindle, analyst at Third Bridge, believes the lockdowns have worked to Ocado’s advantage.
“Ocado couldn’t have asked for better trading conditions, as customers clamoured to secure online shopping slots like never before. The question now is how much of that growth will stick, and how much will slip away as lockdowns ease,” said Hindle.
A report found that the number of UK shoppers who do their weekly shop online doubled since the first coronavirus lockdown.
Steiner expected a continuation of this trend beyond lockdowns as consumer habits change permanently.
“The landscape for food retailing is changing, for good. As we look ahead to a post-vaccine world and a return to a new normality, Ocado Group is very well placed to enable our grocery partners,” said Steiner.