Depleted value of average shopping basket, down 6% year-on-year, amid cost-of-living crisis.
Ocado shares at their lowest level since May 2018 and investors’ confidence takes yet another knock as money continuing to go in wrong direction.
“The core business of Ocado Retail is delivering jam to its customers today but after another trading disappointment shareholders in the business are once more left with a story that promises jam tomorrow,” says AJ Bell investment director Russ Mould. “The Ocado Smart Platforms business still offers undeniable long-term potential, as the company licenses out its warehousing and automation technology, but the core retail model of delivering goods to customers via that online platform is yet to prove it can be profitable.
“The Ocado Retail business continues to add customers but cannot turn this into a profit. This time the problems are higher costs, notably for fuel and dry ice, and customers either trading down through brands or simply fewer items in the face of the cost-of-living crisis.
“A 2.7% increase in Ocado Retail sales is no great shakes when prices are up 5% and a 10% drop in volumes means the average shopping basket’s value is down 6% year-on-year.
“This is clearly giving patient shareholders pause for thought and the share price plunge suggests their patience may now be wearing thin. The shares are now at their lowest level since May 2018.”