Ocado shares surge after online grocer reports record-breaking year
Ocado Retail’s sales boomed in the weeks leading up to Christmas, vastly outperforming the broader market with double-digit revenue and customer growth.
In a trading update issued today, the company, a 50:50 joint venture between Ocado and Marks and Spencer, reported revenue growth of 17.5 per cent in the 13 weeks to 1 December .
Ocado shares jumped 13 per cent in early deals after the update as investors reevaluated the parent company’s prospects.
The online grocer said its average number of weekly orders rose 16.9 per cent, from 407,000 in 2023 to 476,000 in 2024.
The number of active customers grew 12.1 per cent in the quarter, to £1.1m, while the average value of each order ticked up 0.2 per cent to £120.85.
For the full year, the firm reported retail revenue growth of 13.9 per cent – to £2.6bn – and customer growth of 12.1 per cent.
Hannah Gibson, Ocado Retail’s chief executive officer, said: “2024 was a year of strong growth. In the fourth quarter, we accelerated sales again – reaching 500,000 orders per week for the first time at the end of November.”
Gibson said the growth resulted from a “laser focus” on customer service and “unbeatable choice”.
“We’ve made a series of significant improvements – including making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we’ve moved on price and helping new customers discover Ocado,” Gibson added.
Ocado Retail was revamped last year after M&S became increasingly frustrated with the firm’s performance , and pivoted to focus on customer experience and low cost to draw consumers back from cheaper chains like Aldi and Lidl.
“Priorities for this year are raising the bar again in our leading customer proposition, making further progress on improving profitability and transitioning the business onto new technology platforms,” Gibson said.
Ocado’s retail arm is only half of the company’s business model, as it also operates a grocery technology division which supplies warehouse robotics to brick-and-mortar supermarkets.