Ocado says retailers are using weather as an excuse
Tuesday 11 January 2011
The chief executive of Ocado has accused some retailers of using the snow as an excuse for dire performances, as the online grocer delivered a 27 per cent rise in festive sales, despite the severe weather.
Tim Steiner praised the "heroic efforts" of its staff, notably drivers of its 700-strong fleet of vans, for ensuring that Ocado delivered 98 per cent of customer orders in the four weeks to 26 December.
Ocado – which floated on the Stock Exchange at 180p in July – invested heavily in its winter operation, including increasing driver numbers and training for them, and "retuning" its systems to account for routes taking longer in the cold snap. More importantly, Ocado equipped each of its vans with "special winter tyres", which meant it only had to rescue six vans over the latest period, compared with 200 a year ago.
Mr Steiner said it had been unable to deliver to customers only when other motorists got stuck in the snow and closed roads. While the snow had an impact on its performance, he said: "Some retailers are trying to use the snow [as an excuse] for an exceptionally poor performance." In contrast, Ocado, which delivers Waitrose products, posted a 26.7 per cent surge in sales to £50.9m over four weeks to 26 December.
Mr Steiner admitted its flotation had "divided opinion" in the City, but said: "For those that believed [in us], we are delivering and that is an exceptional thing."
Ocado said its sales had jumped by 27.4 per cent to £178.9m over the 16 weeks to 28 November. Mr Steiner said a marginal fall in the average order size to £112.12, from £112.67 a year ago, was due to its customers shopping more frequently. Analysts at Numis Securities edged up forecast for earnings before interest, tax, depreciation and amortisation at Ocado from £20.1m to £20.5m. Numis and a number of other analysts expect Ocado to unveil its maiden pre-tax profit this financial year.
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