Christmas lift strengthens Ocado shares

Kasmira Jefford
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OCADO’s shares enjoyed a 33 per cent lift yesterday after the online grocer said the absence of 2010’s snow and increased delivery slots helped boost sales by 23.8 per cent in the week before Christmas.

The company, founded by three former Goldman Sachs bankers in 2000, reported gross sales of £59m in the four weeks to 25 December, up 16 per cent year on year.

This compares with a 26.7 per cent rise recorded a year ago but investors welcomed the numbers after capacity constraints at its distribution centre in Hatfield, Hertfordshire, forced the troubled company to issue a profit warning last month.

Chief financial officer Andrew Bracey said Ocado’s performance was “encouraging” against the backdrop of an economic slowdown, adding that a pause in expansion work at its warehouse had allowed for more capacity to handle orders.

The grocer said customers were reducing order sizes by a few items and buying into value ranges, with Ocado’s own label sales up by 88 per cent in the four weeks to Christmas.

Shares in Ocado, which fell to less than a third of their 180p per share float price last month following the profit warning, closed at 74p.