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Ocado Retail has cut back its sales expectations for the full year, as the average size of orders falls.
The online supermarket said on Tuesday that it expected to see “a small decline” in sales for the year to November, and “close to break-even” underlying profitability as smaller average order values and rising costs offset growth in the number of customers.
The company, a joint venture between Ocado Group and Marks and Spencer, previously expected sales to grow in the mid single digits. At the start of the financial year it was forecasting 10 per cent sales growth.
Third-quarter sales were up 2.3 per cent on last year and 42 per cent higher than in the equivalent quarter before the pandemic, helped by new delivery capacity.
Customer numbers grew by 23 per cent year on year after the company ran promotions including discounts off initial shops and free delivery. It fulfilled 10.7 per cent more orders in the quarter, but the average order value declined 6 per cent to £116.
Ocado also faces steep increases in the price of fuel, electricity and dry ice, potentially adding £45mn to its annual cost base.
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Image and article originally from www.ft.com. Read the original article here.