Ocado has released its 2018 results, referring to the year as “transformative.” Ocado Retail saw an increase in orders per week to 296,000, with highest orders per week of 340,000. Active customers increased by 11.8% from 645,000 to 721,000, although there was a small decrease (0.4%) in total basket price.
Ocado stated it expects retail revenue to grow by 10 to 15 per cent this year, but suggested that investment in supply chain developments, primarily distribution centres would impact profit. Tim Steiner, Chief Executive said, “Creating future value now will involve us continuing to scale the business, enhancing our platform, enabling our UK retail business to take advantage of all its opportunities for growth, and innovating for the future.”
Investment in UK distribution network
Distribution and administration costs for fulfilment and delivery operations (including head office costs) increased by 15.2% in 2018. With the new customer fulfilment centre (CFC) in Erith, London, opening mid-2018 and a significant capital expenditure investment in the Hatfield site, total costs for new CFCs in 2018 were £80.3million.
In December 2018 Ocado confirmed that its new customer fulfilment centre (CFC) in Erith was processing over 30,000 orders per week. This, combined with ongoing robotic picking tests at the Andover CFC, demonstrate Ocado is continuing to innovate and experiment with new technology to improve its offer.
Ocado Smart Platform
Ocado announced several partnerships over the last year, securing agreements to develop its Ocado Smart Platform with Sobeys in Canada, ICA in Sweden and a deal with Kroger in the USA.
Ocado also announced that it is preparing to launch “Zoom”, a one-hour delivery service with a smaller basket size than the usual Ocado order. Zoom has been compared to Amazon’s Prime Now delivery service and will be trialled in London in spring 2019.