No ‘going back’ after lockdown switch to online shopping, says Ocado boss

The boss of online grocer Ocado has said shoppers will not be “going back” after switching online amid the coronavirus lockdown as the group reported surging half-year sales.

Tim Steiner, chief executive and founder of Ocado, said the “world as we know it has changed” for retailers since the coronavirus crisis struck.

He predicted the shift towards internet shopping will not be reversed even after lockdown restrictions are eased.

His comments came as the group reported a 27% jump in retail revenues to £1.02 billion due to “unprecedented” demand during the six months to May 31.

But Ocado posted first-half pre-tax losses of £40.6 million after it spent heavily on the roll-out of its overseas technology offering, though this was down on the £147.4 million losses seen a year ago.

Ocado’s underlying group earnings fell to £19.8 million from £30.7 million a year earlier after the investment costs.

Mr Steiner said: “The world as we know it has changed.

“As a result of Covid-19 we have seen years of growth in the online grocery market condensed into a matter of months – and we won’t be going back.

“We are confident that accelerated growth in the online channel will continue, leading to a permanent redrawing of the landscape of the grocery industry worldwide.”

Ocado said fees invoiced to overseas technology partners soared  58% to £73.7 million as it ramped up its international expansion drive.

It opened its first robotic distribution warehouses for Casino in Paris and Toronto.

The group raised more than £1 billion last month through an equity and bond raise to help support its growth.

The funding will also be used to help sign up new partners to use its technology and to invest in innovation at a faster pace.

But Ocado’s shares slipped 4% despite the first-half sales boost.

Retail expert James Grzinic at Jefferies said: “Ocado’s first-half results show the benefits from the surge in online demand brought about by Covid-19, albeit one temporarily enabled by consumers’ willingness to take very large deliveries in unusual slot times.”

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