Covid-19: Ocado revenue continues to soar

Ocado has reported retail revenue growth of 40.4% year-on-year in the second quarter of 2020. This compares to a 10.3% growth in the first three months of 2020, demonstrating the increased demand for its online grocery service during the Covid-19 crisis.

The eCommerce merchant also outlined how it has ramped up delivery capacity in response to the sudden surge in demand. This includes the group’s customer fulfilment centres (CFCs) running at peak capacity. It gave the example of its CFC in Erith, South East London, which is now processing 110,000 standard sized orders per week compared to 80,000 at the end of the first quarter.

Ocado also highlighted its work in helping other retailers, such as Morrisons, in expanding their delivery capacity in recent weeks. It says its actions have enabled delivery of over 40% more groceries in the UK than prior to Covid-19. And last month, the group opened its first international CFCs, in France and Canada.

The retailer added that it is in a strong cash position, with £1.2 billion on the balance sheet.

Tim Steiner, Ocado Group CEO commented: “We are facing quite a different challenge to many, as we scale up to play its part in feeding the nation, and as we help our clients launch and roll out their online businesses more rapidly against a backdrop of a likely long term increase in demand for online.

“Ocado remains in a strong position and while we should be grateful that our current challenges are around growth, expansion and increased demand, we have great empathy for all who are facing different challenges at this time. In retail, we are working with our small suppliers to make sure we pay them earlier than normal and we will work closely with any who are struggling.”

Despite the current demand for online groceries, Ocado is suspending its guidance for revenue retail for FY20 due to the uncertainty of the crisis.