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Ocado Retail Ltd (LSE:OCDO), a joint venture between Ocado Group plc and Marks & Spencer Group plc, has released its trading statement for the 13 weeks ending 1st September 2024, reporting solid growth across key metrics. The company saw a notable increase in revenue, active customers, and weekly orders, demonstrating the success of its strategic initiatives.
Revenue Growth and Strategy Success
For the third quarter of 2024, Ocado Retail's revenue grew by 15.5% year-on-year to £658 million. This robust growth reflects the progress made across Ocado's strategy, which focuses on offering unbeatable choice, unrivaled service, and competitive pricing. The company’s commitment to improving its customer value perception through strategic price investments has contributed to its strong performance amid the broader grocery market.
Strong Volume and Customer Growth
Ocado's total volumes, measured by total items sold, grew by 15.4% compared to the same period last year. The number of average weekly orders increased by 14.7%, reaching 437,000 per week. A key driver of this growth was a 10.3% increase in active customers, bringing the total to 1.06 million. Additionally, customers are shopping more frequently, aided by better slot availability and an overall enhanced shopping experience.
Pricing and Basket Trends
Despite the broader trend of grocery inflation in the UK, which stood at 2.0%, Ocado Retail reported a slight decrease in its average selling price of 0.4%. This reflects Ocado’s continued investment in competitive pricing to attract and retain customers. The company’s efforts to provide better value are yielding results, with average basket sizes slightly increasing year-on-year, and the average basket value remaining stable at £120.97.
Upgraded Revenue Guidance for FY24
Following its strong third-quarter performance, Ocado Retail has raised its full-year 2024 revenue guidance. The company now expects revenue growth in the low double digits, up from its previous forecast of mid-to-high single-digit growth. This upgrade signals confidence in continued momentum through the remainder of the year. Importantly, all other aspects of Ocado Group's guidance remain unchanged.
