Ocado forecasts sales growth

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SONY DSC

Published Mar 5, 2012

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British online grocer Ocado posted a double-digit rise in first-quarter sales and forecast an acceleration in sales growth as the year progresses, service initiatives kick in and distribution capacity increases.

The company, which mostly sells the products of upmarket grocer Waitrose via a fleet of brightly coloured vans, said on Monday gross sales increased 10.9 percent to 162.1 million pounds ($257 million) in the 12 weeks to February 19.

That was in line with company guidance of first quarter sales growth of around 10 percent and compares with growth of 10.8 percent in the fourth quarter.

Ocado, founded in 2000 by three former Goldman Sachs bankers, said average orders per week increased by 13.4 percent to 116,987 in the first quarter, although average order size fell to 115.49 pounds from 118.06 pounds.

The firm said 93.2 percent of orders were delivered on time or early, up 0.9 percentage points year-on-year, while 98.2 percent of items were delivered as ordered, up 0.2 percentage points.

The firm's 2011 earnings were hit by higher staffing costs as it battled to overcome capacity constraints at its main distribution depot in Hatfield, north of London.

Ocado said Hatfield was now operating at record levels of capacity with further improvements due to come on stream in the second quarter.

Shares in Ocado, which have lost nearly half of their value since floating at 180 pence in July 2010, closed Friday at 103 pence, valuing the business at about 554 million pounds. - Reuters

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