TIDMOCDO
RNS Number : 9634Y
Ocado Group PLC
15 September 2020
OCADO GROUP PLC
15 September 2020
Ocado Retail Q3 Trading Statement
Continued strong growth in retail sales; switchover to M&S
products marks exciting new phase for JV
Ocado Retail Ltd ("Ocado"), a joint venture between Ocado Group
plc ("Ocado Group") and Marks & Spencer Group plc ("M&S"),
today announces its trading statement for the 13 weeks to 30 August
2020.
Highlights
-- Retail Revenue grew 52% as channel shift to online grocery in UK continues
-- Retail sales grew faster compared to Q2 as demand remained
high versus a seasonally softer quarter in Q3 2019
-- Average order size continues to normalise from COVID-related
peaks to GBP141(1) , but remains above pre-crisis levels
-- Orders per week have increased thanks to a combination of
strong demand, a phased reopening of the website to new customers,
and a normalising of shopping patterns
-- Customers have responded positively to the switchover to
M&S products on the 1st of September, with demand for the new
range driving both an increase in the number of products in
customer baskets and strong forward demand
-- The weighting of M&S products in the average Ocado basket
is higher than Waitrose prior to the switchover, reflecting
positive customer reaction to the addition of M&S to the
range
Key financials
13 weeks to 13 weeks to Growth(4)
30 August 2020 1 September
2019
================ ============= ==========
Retail Revenue(2) GBP587.3m GBP386.4m 52.0%
================ ============= ==========
Average orders
per week(3) 345,000 315,000 9.6%
------------------- ---------------- ------------- ----------
Melanie Smith, Ocado Retail's Chief Executive Officer, said:
"These are transformational times for Ocado Retail with M&S
products now exclusively available online at Ocado.com. The
successful switchover means that M&S products are available to
buy in a weekly shop side by side with branded products for the
first time. As a result, we can now offer customers more choice and
better value than ever before, wider ranges than any traditional
retailer, and thousands of products that are only available online
through Ocado.com.
Our model brings customers the very best customer experience,
supported by sustainable economics and respect for the environment
and the communities we serve. Ocado's innovative technology
solution provides the best service metrics for any online grocery
service in the UK. We believe that our proposition is the lowest
carbon footprint way to shop in terms of emissions and food waste,
with increased hygiene meaning less handling of product in our
fulfilment and delivery.
Our aim is to continue to set the bar as we begin again to
welcome new customers who are seeing the benefits of online
shopping in ever greater numbers and we remain focused and on track
to increase capacity by 40% through to 2021. Finally, I would like
to thank my colleagues for their hard work and dedication in making
this happen, even under the most challenging circumstances. I am
proud of you all".
Update on switchover to M&S products on Ocado.com
Following the go-live of M&S products on Ocado.com in the
first week of August, customers received their first deliveries
from this new range on the 1st of September.
The initial range of 4,400 food products replaces c4,000
Waitrose products providing high quality alternatives at the same
or better prices, M&S favourites, and hundreds of completely
new products which reflect trends that Ocado.com customers are most
excited about such as M&S Plant Kitchen, Organic, Remarksable
and Made Without ranges.
M&S's great value is highlighted through its Remarksable
range which includes M&S Remarksable Best of Both Medium Sliced
Bread Loaf for 65p and M&S Remarksable Select Farms British
Whole Milk for 85p. M&S expects to add around 800 more products
to the range in the coming months including the launch of M&S's
Christmas ranges, Entertain by Ocado and further new product
development.
In addition, Ocado.com now features around 700 M&S Home
& Lifestyle product lines, further enriching the hypermarket
offer for customers with quality M&S products in categories
such as toiletries, baby, kitchen, dining and household.
Excitement around the launch of M&S products has increased
the average basket by around 5 items and is driving strong forward
demand including our biggest ever forward order day, on the day of
launch. 98% of customers are already shopping M&S.
Outlook for the remainder of the year
While uncertainties remain over the scale, and duration, of the
ongoing impact of social distancing restrictions in the UK, the
strong trading performance of Ocado Retail in the first three
quarters of the year, combined with the impact of operational
leverage in the retail business, suggest, given current trends, a
full year EBITDA result for Ocado Group of at least GBP40m.
Oc ado Group, on behalf of the joint-venture, will be hosting an
analyst conference call at 7.30am today. Dial in details are: +44
33 0606 1122, room number: 438894, participant pin: 4132. A replay
facility can be accessed on: +44 33 0606 1122, room number: 095246
for 90 days following the announcement.
Contacts
-- Duncan Tatton-Brown, Chief Financial Officer, Ocado Group plc, on 01707 228 000
-- David Shriver, Director of Communications, Ocado Group plc, on 01707 228 000
-- Fraser Ramzan, Head of Investor Relations, Marks and Spencer Group plc, on 0203884 7080
-- Martin Robinson at Tulchan Communications on 020 7353 4200
About Ocado Retail
Online supermarket Ocado.com was established in 2000 and is one
of Britain's leading online retailers, now a 50:50 joint venture
between Ocado Group and Marks & Spencer Group plc. Covering
geographies comprising over 74% of UK households, every shopping
bag is carefully packed in one of three distribution centres using
market leading software and technology. Shopping is then delivered
direct to customers using a network of regional spokes in
brightly-coloured vans. With award-winning mobile apps, Ocado
Retail delivers over 50,000 products, including big-name brands, a
range of M&S and Ocado own brand products and a growing
non-food selection. Thoughtful service features such as
colour-coded bags, digital receipts provided in date order,
reminder texts with your driver's name, along with convenient
hourly delivery slots complementing award-winning customer service
on email, phone and social media.
Notes
1. Average order size refers to results of Ocado.com and Fetch.
2. Retail revenue comprises revenues from Ocado.com, Fetch, and
Ocado Zoom. Retail revenue in the 13 weeks to 31st May was
GBP580.4m.
3. Average orders per week refers to results of Ocado.com and Fetch.
4. Growth percentage calculated on a rounded basis.
5. The figures used in this announcement are unaudited.
6. A copy of this trading update is available on www.ocadogroup.com and www.corporate.marksandspencer.com.
Cautionary statement
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
assumptions and are subject to a number of risks and uncertainties
that could cause actual events or results to differ materially from
any expected future events or results expressed or implied in these
forward-looking statements. Persons receiving this announcement
should not place undue reliance on forward-looking statements.
Unless otherwise required by applicable law, regulation or
accounting standard, Ocado does not undertake to update or revise
any forward-looking statements, whether as a result of new
information, future developments or otherwise.
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END
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