Ocado reports strong growth, but can't escape the spending slowdown

LONDON — Online grocery retailer Ocado reported strong growth in its quarterly results on Tuesday, as more customers moved to shopping online.

For the quarter to 27th August, revenue was up 13.1% to £312.7 million compared to the same quarter last year, while orders per week were up 16%, to 254,000.

However, the average size of customers’ spend dropped just over a per cent, from £107.56 to £106.25.

While more people appear to be shopping online at Ocado, the retailer does not seem to be immune to the spending slowdown, and shares dropped more than 5%.

Nevertheless, CEO Tim Steiner was positive about the news: “We are pleased to report another strong quarter of growth,” he said. “Our industry-leading technology has continued to set the bar for customer service and satisfaction and we continue to grow sales at a rate significantly in excess of the average for our industry.

“Recent innovations include Ocado becoming the first UK grocer to offer its customers Amazon’s Alexa voice-activated tool, meaning they can verbally modify their online grocery orders,” he said.

Ocado opened a new customer services centre in Andover earlier this year, and is currently preparing to open another, bigger centre in Erith, in 2018. Although this expansion has incurred upfront costs, Steiner said the investments would allow the company to meet customers’ “rapidly growing demand.”

Here is the chart, as of 08:26 BST (03:26 EST) on Tuesday:

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.