9th Dec 2021 16:38
(Alliance News) - Online grocer Ocado Group PLC is scheduled to provide a trading update on Tuesday next week, just as the most important shopping period of the year gets into full swing and new restrictions on high street have been put in place by the UK government.
The update will provide fourth-quarter numbers, Ocado's financial year having ended on November 30.
Back in September, Ocado said revenue in its retail joint venture with Marks & Spencer Group PLC fell in the third quarter after the fire at one of its distribution centres. It also warned of rising labour costs.
Revenue at Ocado Retail dropped by 11% in the third quarter to GBP517.5 million from GBP578.8 million a year before. Average orders per week rose by 1.4% to 338,000 from 333,000 a year earlier. Compared to the third quarter of 2019, revenue increased 38%, Ocado said.
Prior to the fire, revenue had been down by only 1.8% from the bumper lockdown trading of 2020, the company said.
"Next week's fourth-quarter numbers face another tough comparable period, with 2020 revenue growth of 35% to content with," said Matt Britzman, an equity analyst at Hargreaves Lansdown. "With the all-important Christmas season upon us, and competition growing, we'd like to see some strong numbers."
On Tuesday, data from Kantar showed Ocado outperformed the wider UK market, with sales down 2.4% on a year ago in the 12 weeks to November 28, as the overall market shrunk by 3.8%. Ocado increased its market share to 1.8% from 1.7%.
The new restrictions imposed by the UK government on Wednesday are likely to give Ocado fresh impetus.
"Our excitement about Christmas this year has been slightly tempered as news of the Omicron Covid-19 variant has emerged. Online grocery sales fell by 12.5% in the four weeks to late November, as we compare against more orders last year during the second lockdown. As concerns grow over rising case numbers, we expect some people will prefer to shop online again to limit their visits to stores," said Fraser McKevitt, head of retail and consumer insight at Kantar.
Ocado shares were down 0.1% at 1,632.50 pence in London late Thursday.
By Tom Waite; [email protected]
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