Ocado's wait for first annual profit rolls on

Ocado's wait for its first annual profit rolled on yesterday as expansion costs and a partnership with supermarket Morrisons dragged it to a £12.5m loss

Stuart Rose
Stuart Rose

Ocado’s wait for its first annual profit rolled on yesterday as expansion costs and a partnership with supermarket Morrisons dragged it to a £12.5m loss.

The business, which was set up in 2002 and now handles an average of 143,000 orders every week, said it enjoyed a year of “significant progress” in terms of growing customer numbers and average spend.

However, it made an underlying loss of £5.1m in year to December 1, with the recent launch of an online grocery service for Morrisons, based at a new distribution centre at Dordon, Warwickshire, adding to the bottom-line loss.

The deficit came as it emerged that Jason Gissing, a former Goldman Sachs banker, will leave the delivery business at its AGM in May.

He started Ocado from scratch with Tim Steiner, who remains the company’s chief executive.

Chairman Sir Stuart Rose, pictured, said: “Today the business is valued at £3bn, employing thousands of people, helping consumers around the UK in their busy lives.

“They have laid the foundations of a world-class business.”

Ocado has a 25-year deal for the UK’s fourth-biggest supermarket to use its technology and operations, including delivering groceries from Dordon through a Morrisons-liveried fleet.

It has also developed a new online pet store, Fetch.

The company said its number of active customers increased to 385,000 in the year from 355,000 in 2012, while the average basket size rose to £113.53.

Mr Steiner said: “Last year the food retail market in the UK was driven by consumers’ increasing preference for shopping online.

“The momentum seems unstoppable and, as the market evolves, we are leading the way in delivering market-leading service, innovation, and technology to the benefit of our customer.”

The company also confirmed it was considering plans to open a third customer fulfilment centre, in addition to its existing sites at Hatfield and and Dordon, which opened last February

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