Deal or no deal, Ocado out performs its rivals

Ocado has reported that it achieved sales of £272m for the 12 weeks up to 9 August, which was up 17.3% on the same period previous year. The company has previously talked about looking to north America and western Europe for a deal that would see it license its technology.

Average orders per week increased from 163,000 to 190,000, though the average order size was slightly off the pace at £110.46 compared with £111.64 a year ago. Shore Capital experts said the company was suffering “basket erosion”. Brokers at HSBC said that Amazon has a history of sustaining losses while it builds new operations.

Ocado signed its first third-party contract with Morrison in 2013, which helped it post in February its first annual pre-tax profit since it was founded in 2000 by three former Goldman Sachs bankers. Another lucrative deal with a retailer that wants to use Ocado’s top-notch technology platform to quickly launch itself online, seems to be the online retailer’s best bet for the future.

Ocado is competing in a tough online market against the UK’s big four established supermarkets as well as Waitrose and discounters Aldi and Lidl. “We’re still targeting to sign one this year”, Chief Financial Officer Duncan Tatton-Brown told. “Most exposed to any such advance must be Ocado in our view, especially if Amazon targeted the large London market as its entry point”.

CEO Steiner said in an accompanying statement that Ocado will continue to invest in innovation, despite the fierce competition in the British (online) food retail world.