Ocado slips into red despite rising sales

INTERNET retailer Ocado has slumped back into the red, despite rising half-year sales after it took a major hit from the opening of more warehouses.

Investment in new warehouses led Ocado to a loss. Picture: Contributed

The firm, chaired by former Marks & Spencer boss Sir Stuart Rose, said growing customer numbers boosted revenues by 15 per cent to £382.7 million during the 24 weeks to 19 May.

But the cost of opening distribution centres in Dordon, Warwickshire and Welwyn Garden City, Hertfordshire helped drag it to pre-tax losses of £3.8m from maiden profits of £200,000 a year earlier.

Its expanded operations will be used to support a tie-up with supermarket chain Morrisons, which plans to begin delivering groceries to customers’ homes by the end of this year.

Ocado recently struck a 25-year deal for the UK’s fourth-

biggest grocer to use its technology and operations, including delivering groceries from Dordon through a Morrisons-liveried fleet. Ocado is also developing a new online pet store, Fetch.co.uk, and recently started testing the website.

The company’s active customers increased to 360,000 from 337,000 a year earlier, while average orders rose to 139,000 per week from 122,000.

The Morrisons deal has proved controversial because Ocado is already linked with Waitrose, exclusively delivering the supermarket’s products.