Member Article

Ocado record £12.5 million losses but boss remains optimistic

Online grocer Ocado has recorded a loss of £12.5 million across 2013, although its chief executive remains optimistic about the year ahead.

Gross sales at the firm increased by 18.6% and the recent deal to deliver Morrisons’ goods contributed £9.4 million of gross sales over the year.

However sales rises were offset by increased distribution costs and the impact of implementing a senior team with incentives.

Ocado’s new distribution centre also required a £38 million capital expenditure.

Tim Steiner, CEO of Ocado, said: “Last year the food retail market in the UK was driven by consumers’ increasing preference for shopping online. Today the momentum seems unstoppable and, as the market evolves, we are leading the way in delivering market-leading service, innovation, and technology to the benefit of our customers.

“2013 was an extremely busy year for us with significant progress in growing both our customer numbers and average spend thanks to a wider range of products, even better prices, and the fact that we are now even easier to shop. We have continued to grow our general merchandise business, adding depth to the range in certain non-food categories and launching Fetch, our specialist online pet store.

“The successful opening of our new CFC during the year provides us with the capacity to continue to grow and we are well placed to take advantage of significant change in our industry.

“During the year, we also announced a long term agreement with our first strategic client, Morrisons, to provide them with IP and operating services to launch their online grocery business. The efforts of our teams, and the strength of our technology platform, have allowed us to deliver this project successfully in a very short timeframe. This development reflects the increasing demand for online grocery shopping in the UK and internationally, and a validation of the unique technology, IP and operating model pioneered by Ocado. We are confident that we are well positioned to benefit from future strategic developments as online grocery shopping increases in popularity. “

This was posted in Bdaily's Members' News section by Tom Keighley .