Ocado warns over constraints

Shares in Ocado tumbled by nearly 10 per cent yesterday after the online grocer blamed "capacity constraints" and the glut of bank holidays in April for a slowdown in second-quarter sales growth.

Ocado plans to open a second distribution centre in Dordon, Warwickshire, before the end of 2012 but the grocer is finding it tough to keep up with strong demand for orders at its existing warehouse in Hatfield, Hertfordshire. Consumers were less inclined to book delivery slots around the series of bank holidays last month.

Sales growth at Ocado is expected to slow to 17 per cent for the three months to 15 May, down from 24 per cent in the first quarter. The online grocer was upbeat on its profit progression from incremental sales. Ocado's shares closed down by 22p at 211p.

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