Ocado Retail's Record Christmas Drives Revenue Growth

Ocado Retail, the online supermarket joint venture between Ocado Group and Marks & Spencer, has reported a strong finish to its financial year, with sales growth accelerating in the fourth quarter. The company's focus on customer service, unbeatable choice, and operational efficiencies has driven its success, as evidenced by record Christmas sales and increased revenue.

In the 13 weeks to 1 December, Ocado Retail's retail revenue rose by 17.5% to £715.8m, compared to a 15.5% growth in the previous quarter. This impressive performance was driven by a 16.9% increase in average weekly orders, reaching a milestone of 500,000 orders per week for the first time. Additionally, active customers grew by 12.1% to 1.12m, demonstrating the company's ability to attract and retain customers (Ocado Retail, 2024).

Ocado Retail's CEO, Hannah Gibson, attributed the company's success to its laser focus on customer service and unbeatable choice. By ensuring customers can buy all their favorite M&S products, improving service quality, shifting value perceptions, and helping new customers discover Ocado, the company has been able to drive customer loyalty and growth. This focus on customer experience has been a key factor in Ocado Retail's strong financial performance.



Improved operational efficiencies have also played a significant role in Ocado Retail's success. The company has consistently improved the efficiency of its Customer Fulfilment Centres (CFCs), with average units per hour (UPH) increasing by 15% over the Christmas period. This improvement in operational efficiency has allowed Ocado Retail to handle increased demand without compromising service quality and has contributed to the company's profitability.

Ocado Retail's expansion of its product range, including M&S products and Ocado own brand items, has also influenced customer retention and growth. The company's nearly 50,000 products, including around 90% of M&S products available on its site, cater to a wider range of customer preferences, making it more likely that customers will find what they need and return for future purchases. This expansion has contributed to an increase in active customers, mature customers, average orders per week, and basket value.

In conclusion, Ocado Retail's focus on customer service, unbeatable choice, and operational efficiencies has driven its strong financial performance, including record Christmas sales and increased revenue. As the company continues to invest in growth and improve its customer proposition, it is well-positioned to maintain its competitive edge in the online grocery market.