Ocado has reported its strongest-ever Christmas trading period, capping off a successful fourth quarter that saw retail revenue surge by 17.5% to £715.8 million.
The company has had its critics, and these results should go a long way to temper their negativity.
The joint venture between Ocado Group and Marks & Spencer enjoyed robust growth in its active customer base, which expanded by 12.1% to reach 1.1 million customers.
The company’s strategic focus on offering unbeatable choice, unrivalled service and competitive pricing has paid off, with customers shopping more frequently throughout the key festive trading period. TV adverts explaining the reasonable value of Ocado’s service and price matching against Tesco has worked.
Average orders per week climbed significantly by 16.9% to 476,000, whilst maintaining stable basket sizes of around 44 items.
Ocado shares surged 10% in early trade.
During the festive season, Ocado’s comprehensive Christmas range proved particularly popular with shoppers. The M&S party food selection was a highlight, with items such as hot honey halloumi and pigs in blankets drawing considerable interest. The company also saw strong performance in its premium cheese offering, including selections from Paxton and Whitfield, whilst noting a growing trend in low and no-alcohol beverages over the Christmas period.
Ocado said the strong festive period is set to continue into FY2025 and will provide further guidance when full-year results are released in February.
Operational efficiency showed marked improvement, with the company’s Customer Fulfilment Centres (CFCs) exceeding their design capacity during the peak Christmas period. The newest facility in Luton achieved 269 units per hour, contributing to a network-wide efficiency increase of 15% compared to the previous year.
“2024 was a year of strong growth. In the fourth quarter, we accelerated sales again – reaching 500,000 orders per week for the first time, at the end of November,” said Hannah Gibson, Ocado Retail’s Chief Executive Officer.
“We’ve achieved this growth by being laser focused on customer service and delivering unbeatable choice, unrivalled service and reassuringly good value to the households and families that we serve. We’ve made a series of significant improvements – including making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we’ve moved on price and helping new customers discover Ocado.
“As we enter the next phase of our strategy, we are excited about the future of online grocery and our role in shaping it. Priorities for this year are raising the bar again in our leading customer proposition, making further progress on improving profitability and transitioning the business onto new technology platforms.”