The nation has formed new habits during lockdown, particularly in how households shop for food. The big weekly shop for food is back as individuals are encouraged not to venture out to the shops unless for essentials. That’s music to the ears of Ocado which has seen a sharp increase in the average order size.
This news has also taken its share price to a new record high of £17.16, meaning its stock has increased in value by 570% in the past two and a half years.
Theoretically being at home should have encouraged more people to try food shopping online for the first time, however Ocado took the decision in March not to take delivery orders from new customers because operations were already at full capacity.
AJ Bell’s Russ Mould said: “Ocado wants to be seen as a technology company helping other grocery providers to build online fulfilment networks. The past few months will act as a showcase to prospective third party retailers for how its processes coped with extreme circumstances.
“From the consumer’s perspective Ocado may have disappointed because it couldn’t cope with demand, even having to temporarily take down its website. However, in retrospect this was only for a short period and Ocado has managed to bounce back.
“The importance of internet-based orders during the pandemic should have convinced other grocers around the world of the need to have top-notch infrastructure to fulfil online food orders. It should have also removed any doubts among Ocado’s existing customers about their development plans – which is important given chatter last year that its relationship with US customer Kroger wasn’t great.”