Ocado Q1 sales jump 22.6 per cent

12th Mar 2014 07:17

- Quarterly sales rise sharply- Tie-up with Morrisons.com progressing well- Expects to grow with, or slightly ahead of, the market forecastsOnline grocer Ocado said solid trading momentum continued with first quarter sales jumping 22.6% and expects to grow in line with, or slightly ahead of, market expectations.Gross sales climbed to £227.5m in the 12 weeks to February 23rd from £185.5m a year earlier as average orders per week rose 18.4%. The average order size slipped to £117.53 from £117.99. Ocado, which signed a deal with Morrison last year to supply online services, said Morrisons.com is progressing well.It said improved efficiencies had been made in both of its customer fulfilment centres (CFCs) since the end of 2013. Phase 2 development at CFC2 was on track with completion due in the second half of 2014, it explained.Chief Executive Officer Tim Steiner said: "We are pleased with the continued growth in our business. Having launched on January 10th, we are pleased with the operational progress of Morrisons.com, with the service expanded to new geographic catchments in February. "While we are encouraged by our current trading, the retail environment remains both challenging and competitive, and we expect to continue growing in line with, or slightly ahead of, the market."Shore Capital sceptical"Which brings us back to Ocado's business model, the total failure to generate profits and still a derisory returns through centralised fulfilment of multi-temperature products to a fragmented customer base [...] We remain convinced that this model will not work [...]" wrote analysts at Shore Capital this morning.CJ