Ocado’s initial range of 4,400 M&S food products replaces around 4,000 Waitrose products and around 800 more of these products are expected to be added in the coming months as the retail group heads towards Chrismtas. Ocado.com is also expected to add 700 M&S home and lifestyle products such as kitchenware and baby products.
Chief financial officer Duncan Tatton-Brown said he had seen “practically no sign” of losing customers, and it had expected to lose some.
The company faced complaints on social media from customers whose orders were cancelled. Tatton-Brown said a late surge in demand before the M&S launch had caused some “very slight issues”.
Ocado’s recent growth has been underscored by a 79% surge in the share price. The online grocer initially struggled to cope with a surge in demand for delivery slots in early lockdown but still enjoyed a surge in sales as shoppers opted to order food to their homes.
The group has been busy investing in warehouse and distribution space and technology for grocers around the world as it switches towards becoming a tech supplier and away from simply an online supermarket.
Numis analyst Simon Bowler said: “Whilst the equity debate for Ocado is largely focussed on the international solutions business, evidence of continued demand, successful execution and better earnings in the UK helps validate the model, encouraging for the investors and partners.”
Ian Forrest, investment research analyst at The Share Centre, said: "Today’s figures also suggest that the switch made by many people to online grocery deliveries during the lockdown has been sustained so far. Investors will be watching to see if basket sizes remain at similar levels to those previously achieved with Waitrose products, although it is encouraging to see that Ocado is already offering a larger range of M&S products in the new service."
Britain’s supermarkets have been scrambling to build up their online divisions, hiring extra staff as a spike in demand in lockdown appears to be enduring. Many customers who had not tried ordering food online before the Covid-induced lockdown have stuck with the channel, which is typically less profitable for the supermarkets.
