Truck driver shortages constrain Ocado growth
Online supermarket Ocado enjoyed strong sales in 2021, with revenue up 7.2%, but growth was constrained by HGV driver shortages as well as a warehouse fire in southeast London when robots collided at a fulfilment centre, according to a press release. Higher investment in Ocado’s automated warehouses and its solutions business, which sells Ocado’s technology to other retailers, led to a trebling of pre-tax losses from £52.3 million to £176.9m. Total sales reached £2.5 billion in the year to 28 November 2021 as more people shopped online, with all business segments growing.
Ocado Retail, the joint venture Ocado runs with M&S, contributed £2.3bn, up 4.6%, while UK solutions and logistics grew by 8.6% to £710.4m. Customer numbers were up by 22% to 832,000 and orders rose by almost 12%, partially offset by a 5.8% drop in average basket size to £129.
Ocado Group CEO Tim Steiner said:
“The past year has further reinforced that demand for online grocery is here to stay. In the majority of mature markets, the fastest growing channel is online and to truly win here food retailers need to deliver the best offer with the best economics across all customer missions. The new generation of Ocado technology, which we have called ‘Ocado Re: Imagined’, represents a transformational leap forward allowing our partners to comprehensively out-compete peers online.”
The online channel now accounts for 12% of the UK grocery market, a figure that is forecast to rise to 18% by 2025, according to research company GlobalData.
Overseas, the retailer has doubled its number of live international sites to four, with the first two opening in the US for Kroger located in Ohio and Florida. This adds to existing sites in Canada and France, for Sobeys and Groupe Casino respectively.