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Ocado Retail has announced an increase in its full-year sales guidance following a positive revenue performance in the third quarter, primarily driven by an uptick in customer numbers. The joint venture, formed between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC, now anticipates top-line growth in the "low double digits," an improvement from the previous forecast of "mid-high single digits"
While revenue growth has been robust, profit margin guidance remains unchanged, with an EBITDA margin projected at approximately 2.5%. This revenue growth occurred alongside a 0.4% decline in average selling prices, in contrast to a 1.5% increase during the first half of the year.
In the third quarter, Ocado Retail reported a 15.5% increase in revenues, reaching £658 million, following an 11% turnover growth in the first half. The volume of items sold rose by 15.4% compared to the same quarter last year, while average orders per week increased by 14.7%, totaling 437,000 orders—up from a 9.2% growth rate in the first half.
Active customer numbers also showed significant growth, rising by 10.3% to 1.06 million, compared to an 8.1% increase in the first half. This growth has been attributed to improved slot availability and enhancements in the overall grocery proposition. The average basket value remained largely stable year-on-year at £120.97, although it declined slightly from £123 in the first half. However, basket size saw a modest increase compared to the previous year.
Hannah Gibson, the chief executive of Ocado Retail, highlighted the positive momentum generated by the company’s strategy, which focuses on enhancing choice and pricing while delivering unparalleled service. Customers now benefit from an expanded selection, including a broader range of M&S food products, improved convenience through better delivery slot availability, and enhanced value initiatives such as the Ocado Price Promise and recent price reductions.
