Ocado ‘gaining customers from the discounters’

Ocado ‘gaining customers from the discounters’

Online supermarket Ocado Retail has seen a significant increase in active customers, with a growth of 10.6%, as CEO Hannah Gibson reveals that some customers are switching from discounters like Aldi and Lidl to Ocado for the first time.

Gibson stated, “In the last period, it’s small numbers, but you can see people switching from Aldi and Lidl for the first time.” The retailer’s active customer base expanded to 959,000 during the 26 weeks ending in May this year, with many new customers making the switch from rival supermarket online services to Ocado.

“We’re appealing to a broader cohort of customers now than we ever have done,” Gibson added.

Ocado’s strategy includes price-matching some products, like its Kido own-label nappies, with Aldi, and offering around 10,000 products matched against Tesco through its Price Promise, reintroduced in March.

Average orders per week witnessed a 4% increase, reaching 392,000, and the average basket value rose by 1.5%, primarily driven by an increase in average selling price. However, this growth was offset by a decline in basket size, which averaged 45 items, and a decrease in order frequency.

While the joint venture with M&S saw a £31 million profit a year ago, it reported a £2.5 million loss during the 26 weeks ending in May. Nevertheless, group CEO Tim Steiner expressed confidence, stating that the business is making “good progress” and returned to profitability in the second quarter as prices were sharpened.

The retailer’s share of the online grocery market increased from 12.7% to 13%, and Gibson believes it can go even higher in the future.

“I won’t put a number on a share we can get to, but it can and it will be a lot higher,” Gibson commented.

Despite some recent comments by M&S CEO Stuart Machin about availability issues and M&S chair Archie Norman expressing dissatisfaction with Ocado Retail’s performance, Gibson insists that relations between Ocado and M&S are positive. She stated, “There’s a lot to get through, but that’s a positive thing. There is so much opportunity for us working better together, and that journey is now happening.” Gibson also mentioned that they are collaborating on range, availability, and marketing opportunities, and are excited about the future direction of Ocado Retail.

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