Ocado's share price climbs as sales rise - but order sizes slip

 
Catherine Neilan
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Ocado: Investors were hopeful of a lucrative deal with Amazon (Source: Getty)

Ocado may have lost out on a lucrative tie-up with Amazon, but sales are still surging ahead, its latest update shows.

The figures

Gross group sales at the delivery business - which includes its Morrisons agreement - rose 15.3 per cent to £312.4m in the 12 weeks to 21 February, while retail sales - which includes Fetch and Sizzle - climbed 13.8 per cent to £286.7m.

Average orders per week rose 16.9 per cent to 214,000 - however the average order size slipped 2.9 per cent to £111.41.

Investors lapped this up: Ocado's share price was up nearly seven per cent in early trading.

Why it's interesting

It had been heavily rumoured that Ocado was close to launching a tie-up with Amazon at the start of the year, a move which, judging by the share price movements, investors were strongly supportive of and would have seen Ocado help the US etailer roll out its fresh groceries business here in the UK.

But it wasn't to be: in February, Morrisons confirmed it was signing a deal with Amazon to deliver fresh food in the UK - hugely important for that struggling supermarket, but a move which caused Ocado's share price to tumble (and a few others along with it).

What Ocado said

Chief executive Tim Steiner said: "We are pleased with the steady progress in our business, maintaining double digit sales growth in a retail environment that remains challenging, and post period end we shipped over 250,000 orders in a single week for the first time.

"We believe our focus on customer satisfaction and commitment to improving what we offer to consumers through innovation and our proprietary IP will support further growth. Notwithstanding the tough nature of the marketplace, we expect to continue growing ahead of the online grocery market."

In short

Ocado is doing well on its own - but investors were hoping for more through a partnership that was never to be.

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