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Ocado Retail Sees Strong Growth in Customer Numbers and Sales
British online supermarket Ocado Retail reported a 10.6% revenue increase in the latest quarter, maintaining guidance for 2023-24. Partnering with Marks & Spencer, it saw a 3% stock price increase, reaching £645.3 million in retail revenue with 6.4% customer growth. Inflation easing, Ocado outperformed in customer numbers and sales.
British online supermarket Ocado Retail has reported a 10.6% increase in revenue in the latest quarter, buoyed by an increase in customer numbers and a strong partnership with Marks & Spencer. This surge has led to a 3% rise in Ocado's stock price, with retail revenue hitting £645.3 million and active customers growing by 6.4% to 1.02 million. Despite ongoing financial performance concerns, with the company consistently recording losses over the past 25 years, the retailer has maintained an optimistic outlook for 2023-24, projecting "mid-high single digits per cent" revenue growth for the full year.
Additionally, research from Kantar revealed that Ocado and Waitrose were the only grocery retailers to boost shopper numbers in the first quarter as grocery price inflation eased to a two-year low. Ocado, in particular, enjoyed a 9.5% jump in sales, outpacing the wider online market growth of 6.6%. During this period, the online supermarket and Waitrose capitalized on a resurgence in demand for branded and premium own-labelled goods, with sales of premium own-brand lines jumping by 16.1%.
Despite a slight slowdown in grocery price inflation, many UK households continue to face financial struggles due to continuous price increases since the pandemic. With average grocery prices still on the rise, consumers have been looking for cheaper options, leading to discounter price-match deals being a significant feature in shoppers' baskets at major supermarkets like Tesco PLC, J Sainsbury PLC, and Asda.
Ocado's recent performance has shown strong growth in both customer numbers and sales, outperforming many of its competitors in a challenging economic climate. However, the company's long-term financial health remains a topic of concern among industry analysts, with some expressing skepticism about the sustainability of its business model. Despite these concerns, Ocado's current success indicates a positive trend in the online grocery market, driven by strategic partnerships, a focus on premium and branded goods, and the company's ability to adapt to changing consumer preferences.
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