Ocado growth slows to ‘single digits’ as cost of living crisis intensifies

Ocado Retail has warned its joint venture with Marks & Spencer will see sales and profits in ‘single digits’ due to ongoing pressure on customer spending.

The online grocer said sales declined by 8% in the quarter to April 25, compared with a 5.7% fall in the previous quarter.

As a result it attributes the “slower than expected” sales growth to the impact of a rise of fuel costs and higher utility bills. As a result, Ocado also predicts a single digit EBITDA margin.

READ MORE: Ocado directors purchase cut-price shares

Ocado said it has benefited from a rise in customer numbers, delivering 400,000 orders to customers for the first time.

However, although customer numbers were up 12% year-on-year, year to date, the rate of growth has slowed as customers respond to short term promotions.

“Since Ocado Retail’s Q1 trading update on March 17, the trading environment has deteriorated, as has been widely reported in industry data, with the cost-of-living crisis compounding the impact of a return to more normal consumer behaviours as restrictions have ended and many people return to the office,” Ocado Retail said.

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