Online supermarket Ocado's sales jump 40%

Tuesday 12th May 2020 16:00 EDT

Buoyed by the lockdown in the UK, British online supermarket Ocado has reported a jump of 40.4% in second quarter. The firm has raised capacity to meet the rapid surge in demand as the country battles coronavirus lockdown. The growth skyrocketed from 10.3% in the first quarter extending gains for 2020 to 35%.

After the outbreak of Covid-19 pandemic, the country has been under lockdown since March 23. Recently, the Prime Minister Boris Johnson has indicated that the country is past the peak of the pandemic. In March, the sudden surge in traffic forced the firm to stop registration of new customers. The firms also had to start a queuing system to cater to heavy demands.

The firm’s finance head Duncan Tatton-Brown said that it took them a few weeks to understand the new scenario and they couldn’t serve the customers as well as they would have liked to. Before the outbreak, the online delivery system had a share of 7% in UK’s grocery sales, about one out of every 15 households. Before the pandemic’s onslaught, online market leader Tesco enjoyed a 35% share in the country’s online grocery market, while Ocado had about 14%.

Tesco, Sainsbury's, Asda and Morrisons – the big players of UK have been strengthening their online capacity to keep pace with the rampaging demands. Data suggests that even if delivery capacity is doubled, around 85% of the market would still need to be served by stores. "There is too much demand in the UK for online (grocery) for the UK operations to serve that," Tatton-Brown was quoted as saying.

Ocado's capacity had increased to enable the delivery of over 40% more groceries in the UK than before Covid-19 hit, with its mature warehouses running at their peak and at their best ever efficiencies. The number of items per customer basket appeared to have passed its peak, but remained high, Ocado said. The share of fresh and chilled products in the mix, relative to ambient store cupboard items, was also returning to normal, it added.

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