Ocado has turned around its retail arm following a series of price cuts that have convinced shoppers to return to the retail giant.
Its online grocery arm, a joint venture with 50-50 with Marks and Spencer, reported an 8.4 per cent jump in orders volumes per week to 242m during the 13 weeks to 3 March.
As a result, revenue expanded 10.6 per cent to £645.3m, and volumes grew 8.1 per cent year over year.
Hannah Gibson, chief executive officer at Ocado Retail said: “’We have made a strong start to the year, building on the momentum we established in 2023 through the progress of our Perfect Execution programme.
“We are delivering improvements in our proposition for customers, across unbeatable choice, unrivalled service and reassuringly good value.”
She added: “During the first quarter, we stepped up our efforts: enriching our product range with the strong growth of core M&S grocery lines and the debut of Makers Market, using our unique model to showcase incredible small brands; further enhancing slot and product availability; and lowering the price of 1,700 more products in our latest Big Price Drop promotion alongside further expanding the Ocado Own Range.”
“Our strategy is resonating with customers and volume growth is building well. There’s still so much more we can do and I’m looking forward to raising the bar even further in 2024.”
The news is positive for Ocado, which has struggled to excite both investors and customers in recent years.
Tensions are also brewing between Ocado and Marks and Spencer, with the pair currently embroiled in a dispute over a final payment related to their online food joint venture.
Ocado and retail giant Marks signed a 50:50 deal nearly five years ago for Ocado to sell the retailer’s food via its online store, with Marks paying an upfront sum of over £560m.
It is due to pay an additional £190.7m this August, based on certain performance targets being met.
Marks has claimed Ocado has not reached these performance targets, so it is withholding the final payment.
This disagreement has escalated, with Ocado warning of potential legal action if its partner does not hand over the final payment.