Ocado Retail, the joint grocery venture between Ocado and Marks & Spencer (M&S), has experienced a surge in revenues in the third quarter. Despite a slight decrease in the number of items in its average basket, the company recorded a 7.2% increase in sales to £569.6m compared to the same period last year. Average weekly orders on Ocado.com also grew by 1.9% to 381,000.
To regain market share, Ocado Retail implemented a series of price cuts on popular items like kale, avocados, and organic vegetables. This strategy appears to have been successful in attracting back the middle-class consumers it had lost previously.
Earlier this year, Ocado Group CEO Tim Steiner acknowledged that the joint venture with M&S had fallen short of expectations. However, the latest trading update indicates that the company is on track to achieve its full-year targets, forecasting “marginally positive” underlying profit.
Hannah Gibson, CEO of Ocado Retail, credited the success to the company’s “Perfect Execution strategy” which focuses on optimizing every aspect of the customer proposition and operating model. She expressed confidence that the company will deliver “mid-single digit revenue growth and full year profitability” in its upcoming full-year results.