Jul 14, 2020

Ocado retail profit doubles as grocery delivery soars

Profit at Ocado Retail almost doubled during the first half of the year as demand for grocery delivery soared during the coronavirus crisis, with the group predicting that much of the increase in demand would persist. "As a result of Covid‐19 we have seen years of growth in the online grocery market condensed into a matter of months and we won't be going back." Sales at Ocado Retail, a joint venture between Ocado and Marks and Spencer, rose 27 per cent across the six months to £1.02bn. That compares with 48 per cent reported by market leader Tesco in its first fiscal quarter and the 87 per cent first-quarter rise at J Sainsbury. Ocado's highly automated centralised warehouses were unable to increase capacity as quickly, although their efficiency meant that distribution costs rose only 15 per cent, almost half the growth in sales. Ocado recently raised £1bn via an issue of shares and convertible bonds to help fund its international activities.

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