Ocado Retail, a collaboration between the Ocado Group and Marks & Spencer, reported a 10.6% rise in revenue for the first quarter of fiscal 2024 (Q1 FY24), climbing to £645.3m ($815.5m) from £583.7m in Q1 FY23.
The growth is credited to a substantial surge in the volume of items sold and a rise in average weekly orders.
The company’s total products sold in the 13 weeks leading up to March 3, 2024, increased by 8.1% year over year to 242.1 million from 223.9 million in the same quarter the previous year.
The average weekly orders also rose by 8.4%, going from 382,000 to 414,000, pointing to strong growth in active customers. By the end of the quarter, customer numbers grew by 6.4% to reach 1.02 million.
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Ocado Retail saw a modest increase of 2.1% in its average basket value, rising from £122.94 in Q1 FY23 to £125.47 in Q1 FY24.
The average basket size stayed consistent year-on-year at 45 items.
Ocado Retail CEO Hannah Gibson stated, “We’ve had a solid beginning to the year, continuing the momentum we set in 2023 with the advancement of our Perfect Execution programme.
“We are improving the products and services we provide to our clients, emphasising unmatched variety, unrivalled quality, and continuously good value.
“In the first quarter, we increased our efforts by introducing Makers’ Market and expanding our product line, which included robust growth in our core M&S grocery items. With the help of our unique approach, we were able to highlight amazing small businesses, expand the Ocado own-brand range, raise product and slot availability and cut prices on an extra 1,700 products during our most recent Big Price Drop campaign.
The retailer reaffirmed the guidance given on 29 February 2024, in line with Ocado Group’s FY23 results.
Ocado Retail expects a mid to high single-digit revenue growth and an underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 2.5%, excluding Hatfield fees of £33m per year.
In March 2024, M&S and Ocado had a dispute over a £190 million ($240 million) final payment linked to Ocado Retail.
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