City underwhelmed by Ocado's showing

Online grocer Ocado's difficult start to life as a public company continued yesterday after new sales growth figures failed to impress the City.

The firm was forced to slash the price for its initial public offering to 180p in July - down from initial hopes of 200p and 275p - after retail analysts and fund managers hit out at the firm for overvaluing its business.

Shares started to drop as soon as the company was officially listed on 26 July, falling to 131p at one stage, and its first trading update since the controversial move failed to have a positive impact. A 29.5 per cent increase in gross sales to 126.5 million in the 12 weeks to 8 August did not boost confidence, as shares dropped 7 per cent to close last night at 146p.