Jul 21, 2022
Ocado reviews UK expansion as shoppers cut back
Ocado has said it may reconsider its timetable for expanding capacity in the UK as customers cut back on their online grocery shopping. Since the peaks during pandemic, when Ocado was held back by its inability to quickly increase delivery capacity at its warehouses, the online grocery market in the UK has contracted by around a fifth as shoppers have returned to stores. Sales at Ocado Retail, the group's UK ecommerce joint venture with Marks and Spencer, fell 8 per cent in the first half. In the international solutions business Ocado said six customer fulfilment centres constructed in the US for Kroger - its most important single client - were increasing capacity as planned and revenue more than doubled to £59mn. Although Ocado has not signed up a major new client for its technology since Japan's Aeon in December 2019, Steiner said the company had "Never been busier" in terms of negotiations with potential corporate customers and that its new technology, which reduces the upfront cost and increases the efficiency of fulfilment centres, had generated widespread interest. Ocado shares were down 2.5 per cent in midday trade but analysts were broadly relieved that there had been no further deterioration in the UK and no hitches in the rollout of customer fulfilment centres overseas.
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