Ocado’s stock performed worse than any company in the FTSE 100 in February as it was hit by a myriad of issues.
The online grocer saw its shares drop 23 per cent throughout February, coming off the back of a hugely successful 2020 in which its stock grew more than 100 per cent.
According to analysts this was largely driven by Ocado’s full year results, released on February 9, which saw it post over £44 million in losses despite seeing retail sales jump 35 per cent.
Part of this loss was due to heavy investment in its Ocado Solutions arm, which sells its automated picking technology to third party retailers.
Investors feared that the heavy investment, set to top £700 million next year, and slow pace of growth show worrying signs for the UK tech company.
Its share price was also impacted by news that the UK government could implement an online sales tax in its Spring Budget today.
Prominent online retailers including Boohoo, Asos, Amazon and Ocado all saw their share prices take a hit, with the latter seeing share prices drop nearly 4.45 per cent to £26.30.
This was compounded by cautious reports of a potential easing of lockdown in the UK, adversely affecting Ocado’s stock as it would mean less people rely on online grocery deliveries.
In late February, Ocado’s shares took another dip after it dropped down the rankings of consumer watchdog Which?’s annual supermarket survey.
After topping the rankings last year, Ocado dropped to fifth place seeing Aldi take the top spot and Sainsbury’s steal the title of best online offering.
According to the survey, which asked 3000 shoppers about their in-store and online experiences, Ocado’s “reputation took a hit after the scale of demand meant it stopped accepting new customers”.
Despite the numerous hits Ocado took in February, analysts believe it is set to resume its share price rally when the economy begins to settle.
Its recently opened mini-fulfilment centre in Bristol, set to dramatically increase its capacity in the UK, will also help ease investors concerns in the coming weeks.