Ocado forecasts faster sales growth

Online grocer Ocado posted a double-digit rise in first-quarter sales and forecast an acceleration in sales growth as the year progresses, service initiatives kick in and distribution capacity increases.

The company, which mostly sells the products of upmarket grocer Waitrose via a fleet of brightly coloured vans, said on Monday gross sales increased 10.9 per cent to £162.1m in the 12 weeks to 19 February.

That was in line with company guidance of first quarter sales growth of around 10 percent and compares with growth of 10.8 per cent in the fourth quarter.

Ocado, founded in 2000 by three former Goldman Sachs bankers, said average orders per week increased by 13.4 per cent to 116,987 in the first quarter, although average order size fell to 115.49 pounds from £118.06.

The firm said 93.2 per cent of orders were delivered on time or early, up 0.9 percentage points year-on-year, while 98.2 per cent of items were delivered as ordered, up 0.2 percentage points.

The firm's 2011 earnings were hit by higher staffing costs as it battled to overcome capacity constraints at its main distribution depot in Hatfield, north of London.

Ocado said Hatfield was now operating at record levels of capacity with further improvements due to come on stream in the second quarter.