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Ocado sales surge as home deliveries rise in Covid-19 pandemic

Ocado has reported booming sales at its online grocery service as shoppers switched to supermarket home delivery services during the Covid-19 pandemic.

Retail sales at Ocado, which now delivers Marks & Spencer groceries, jumped 35% to £2.2bn in 2020, but the overall group, which includes its tech business, Ocado Solutions, made a small loss of £44m. That compares with a pre-tax loss of £214.5m in 2019.

Tim Steiner, Ocado’s chief executive, said coronavirus has caused a dramatic shift in grocery retail and the landscape was “changing for good”.

“Many customers who have tried online grocery for the first time have seen the benefits and are saying they are unlikely to revert to pre-crisis shopping habits,” the company said.

The Covid-19 crisis has seen demand for grocery deliveries rocket to account for 14% of the market. However, Ocado was limited in its ability to take advantage of the huge increase as its robot powered warehouses were soon working at full capacity.

The company said sales growth in the coming year would be “highly dependent” on the length of Covid-19 restrictions. However, it should have more delivery slots available in the UK in the coming months as three new hi-tech warehouses open. It also plans to pour about £700m into new projects for its technology clients.

After the pandemic was over online shoppers would not only want to do their big grocery shop online, but smaller convenience deliveries and click and collect services would also be in greater demand, Steiner said. Ocado’s first site dedicated to its same-day delivery service, Ocado Zoom, is already full. It has secured a second London site for the rapid service and is looking for another dozen inside the M25.

On an underlying basis, Ocado made a profit of £73.1m in the year to 29 November, compared with the previous year’s £43.3m.


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