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Ocado reports increasing losses

Ocado reports increasing losses

Ocado, a UK-based online grocery retail service, has reported that it has been experiencing increasing losses, despite making some progress with regard to sales over the past year.

The firm has released preliminary trading figures for the last 12 months, which show that sales increased by 18.6 per cent to reach a total of £843 million. 

However, Ocado also announced that it had made a loss of £12.5 million throughout the year - a significant amount as the previous year it only lost £600,000.

After the announcement of these figures, shares in the grocery business decreased in price by approximately three per cent. Since Ocado began its joint venture with Morrisons in 2013 - a deal that sees the two grocery companies in a 25-year online partnership - shares had risen in value by over 200 per cent.

Ocado did make a number of improvements during the year though. The company's chief executive officer, Tim Steiner, said: "2013 was an extremely busy year for us with significant progress in growing both customer numbers and average spend thanks to a wider range of products and better prices."

He added that the business had also seen success with the launch of its new pet store Fetch and by expanding its general merchandise sector.

The report shows that Ocado experienced a 40 per cent increase in new customers compared to the previous year and that the average amount each person spent per shop had also grown, rising from £112.10 to £113.53 over the past 12 months.

Despite the increase in sales and customers, John Ibbotson - retail consultants director at Retail Vision - has predicted that Ocado will continue to operate at a loss for some time.

The grocery retailer is yet to release figures showing a profit for the past year, but as more and more UK customers are preferring to do their food shopping online, things look positive for the business.

 

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