Ocado Retail reported a significant surge in sales in the weeks leading up to Christmas, outpacing the broader market with double-digit revenue and customer growth.
The company, a joint venture between Ocado and Marks and Spencer, announced a 17.5 per cent increase in revenue in the 13 weeks leading up to 1 December, according to a recent trading update, as reported by City AM.
Following the announcement, Ocado shares saw a 13 per cent rise as investors reassessed the parent company’s prospects. The online grocer revealed that its average weekly orders increased by 16.9 per cent, from 407,000 in 2023 to 476,000 in 2024.
Active customers also grew by 12.1 per cent in the quarter, reaching £1.1m, while the average order value slightly increased by 0.2 per cent to £120.85. For the full year, the firm reported a retail revenue growth of 13.9 per cent, amounting to £2.6bn, and a customer growth of 12.1 per cent.
Hannah Gibson, Ocado Retail’s CEO, stated: “2024 was a year of strong growth. In the fourth quarter, we accelerated sales again – reaching 500,000 orders per week for the first time at the end of November.”
She attributed the growth to a “laser focus” on customer service and an “unbeatable choice”. “We’ve made a series of significant improvements – including making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we’ve moved on price and helping new customers discover Ocado,” added Gibson.
Last year, Ocado Retail – better known as Ocado.com – underwent a significant revamp after M&S expressed concerns over the firm’s performance. The company shifted its focus towards enhancing customer experience and offering competitive pricing to win back customers from more affordable chains such as Aldi and Lidl.
“Priorities for this year are raising the bar again in our leading customer proposition, making further progress on improving profitability and transitioning the business onto new technology platforms,” stated Gibson. Neil Shah, Executive Director of Content & Strategy at Edison Group, commented on Ocado’s performance, noting that it “reflect[ed] the company’s ability to navigate a competitive market, driven by a growing customer base and improved order volumes.”
He added, “As Ocado enters 2025, its combination of strategic investments and technological innovation positions it well for continued growth. While the online grocery market remains highly competitive, Ocado’s progress in enhancing its operations and customer proposition signals strong potential for the future,” However, retail is just one facet of Ocado’s business model; the company also boasts a grocery technology division that provides cutting-edge warehouse robotics to traditional supermarkets.
Chris Beckett, head of equity research at Quilter Cheviot, pointed out that “for the company to achieve meaningful uplift in its share price, it needs to secure more international orders for its warehouse and logistics technology. “.
“These partnerships, which form the backbone of its global expansion strategy, are essential for diversifying revenue streams and demonstrating scalability. Success on this front could act as a catalyst for re-rating its valuation in the market.”
“At the same time, capacity constraints during peak periods, such as Christmas, underline the need for further investment in infrastructure over time, potentially in the form of new warehouses, to meet growing demand and sustain its growth trajectory.”
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