Ocado and M&S’ new joint venture enjoys double-digit growth
Ocado Retail has enjoyed double-digit growth over the third quarter, marking the first set of results since the launch of its £1.5 billion joint venture with Marks & Spencer.
M&S completed a deal with the technology giant in August to buy 50 per cent of Ocado’s UK retail business for £750 million, creating a new joint entity called Ocado Retail.
In the 13 weeks to September 1 Ocado Retail saw revenues rise 11.4 per cent to £386.3 million, marking a significant acceleration from Ocado’s 9.7 per cent growth in the whole of its first half.
It attributed this acceleration to the launch of a brand new state-of-the-art robotic warehouse in Erith, its fourth in the UK secured after signing a separate fulfilment deal with Morrisons.
Average order values per week also saw healthy growth of 12.1 per cent to 314,000, though average order sizes dipped slightly by 0.8 per cent to £105.42.
“Bringing Ocado and M&S together online will give UK consumers even greater choice, value and service and will create important new opportunities for our colleagues, suppliers, and other stakeholders,” Ocado Retail’s chief executive officer Melanie Smith said.
“As we continue to enhance our offering and add more capacity in the UK, our leading partnership will deliver the very best experience to an ever-growing number of customers.”
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Ocado Retail joint venture will begin fulfilling online M&S home-delivery orders by September 2020.
Smith, who became head of the joint venture last month, added that the strong results highlighted Ocado’s resilience following the devasting fire at its facility in Andover, which led to it posting a £142.8 million loss in the six months to June.
“These first set of results from the joint venture between Ocado Group and M&S show the resilience of Ocado following the Andover fire and the momentum the business now has,” she added.
Ocado’s chief executive Tim Steiner said: “As chairman of Ocado Retail, I would like to welcome Mel to her new role.
“Together, we are committed to improving even further the Ocado customer experience and growing the business to the benefit of all our stakeholders.”