Ocado Christmas sales soar and looks ahead to first ever full-year profit

Guy Bentley
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(Source: Ocado)

Online grocer Ocado reported its customer fulfilment centres processed close to 40 per cent more items in the week to Christmas for Ocado.com and Morrisons.com than over the same period the previous year.

On the company's biggest day in the run-up to Christmas sales climbed 15 per cent from 2013 to almost £6m. Gross sales for the month of December were also up 14.8 per cent on the same period last year.

Why it's interesting

Online shopping is becoming ever more popular, and Ocado's strong Christmas trading shows there is still a strong appetite for the service. When the company delivers its full-year results in February it stands a good chance of reporting its first ever full-year profit.

What Ocado said

Tim Steiner, chief executive Officer of Ocado, commented:

Our focus remained on delivering the highest service levels at this very important time for customers, while offering the widest range at competitive prices

In short

Ocado may be flying high after a bumper Christmas but is still subject to rigorous competition in the sector. The price war between the big four supermarkets could prove a challenging environment for the grocer over the next year.

John Ibbotson of the retail consultants, Retail Vision, commented:

With the Big Four now aggressively reducing prices and margins, Ocado will have to do the same: but has it got the scale and financial strength? No is almost certainly the answer.

The deflationary environment we seem to be entering could have a devastating effect on Ocado.

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