Ocado's retail revenue grew by 40% to £599m in Q1, for the 13 weeks to 28 February 2021.
The retailer has also launched a refresh of its private label range with a focus on reducing plastic and non-essential packaging components.
Strong order size
In Q1, retail sales grew faster in comparison to the previous quarter (+35%) driven by an increase in average order size to £147. This was due to seasonal strength over the festive period in addition to larger orders as a result of further national lockdown measures in the UK. In February, Ocado also announced it has discontinued its Low Price Promise price matching tool. It removed this scheme and replaced it with ‘hundreds of low priced items’, which will be marked on its online store with a red ‘£’ icon. Average orders per week was up 2.5% YoY to 329,000.
Ocado said products from the M&S range consistently accounted for more than 25% of the average basket. This after M&S products exclusively launched on Ocado in September 2020.
New CFC launches
During the quarter, operations started at Ocado’s new mini-Customer Fulfilment Centre (CFC) in Bristol, with capacity for over 30,000 orders per week. It will also offer local customers quicker delivery. Its CFC at Erith, which has capacity of 200,000 orders per week, ended Q1 serving 150,000 orders per week.
Ocado also plans to open two standard sized CFCs in 2021, with a second mini-CFC to go live in 2022. It also revealed it is seeking a minimum of 12 new micro sites, primarily in London to support its Ocado Zoom rapid delivery proposition.
Own label refresh
As part of Ocado’s wider rebrand from green ‘apple’ to purple ‘grape’ colours, it has launched a newly refreshed own label range. The range consists of 530 products, including new additions such as a Chimichurri British Flat Iron Steak. It adds to Ocado’s range of more than 49,000 products.
Source: Ocado Retail
As well as featuring a bold new packaging design, improving the sustainability credentials of the range was a focus for Ocado. 27 tonnes less plastic packaging has been used across the range, 640,000 plastic nets have been removed, and nine million non-essential packaging components have been taken away. For example, Ocado has removed adhesive labels on its own-range egg boxes, instead printing the information directly onto the box.
Rachel Cox Reynolds, head of own-range and technical compliance, said: “We have been busy working on a new look and feel to the Ocado own-range for some time now and are delighted to be able to share the final results. Each and every one of our own-range items has received a fresh makeover featuring brighter colours and bolder patterns, just in time for the Spring. These products, with their updated imagery, continue to demonstrate the great quality that Ocado customers have come to expect, whilst also offering superb value for money for our customers.”
Looking for more insight on Ocado?
Subscribers can read the Ocado Strategic Outlook report here, which answers the following key questions along with implications for your business:
- How will Ocado Retail maintain its growth?
- What’s the impact of the planned new capacity in the UK?
- Why is the Ocado Smart Platform launching in these markets?
- How efficient is the Smart Platform?
- Can the Smart Platform stay ahead of the competition?