Ocado Retail, a joint venture between listed supermarkets Ocado Group and Marks & Spencer Group, has reported a large leap in revenues.
The JV also said its first mini fulfilment centre has opened following a 40% rise in retail revenue to £599 million in the 13 weeks to 28th February 2021.
Average orders per week were up 8,000 to 329,000, with M&S products accounting for more than 25% of the average basket.
M&S and Ocado signed the £750m JV following the end of Ocado’s partnership with Waitrose.
Ocado Retail, headquartered in Hatfield, Hertfordshire, said its first mini CFC in Bristol had ‘opened up 30,000 orders per week more capacity’ with shorter lead times for local customers.
The company will be opening two standard–sized CFCs in FY21, while a minimum of 12 new micro sites are being sought, primarily in London.
This will support the roll-out of Ocado Zoom, which offers deliveries within one hour of ordering.
A second mini CFC will open in 2022 and progress is being made securing sites for further standard–sized CFCs.
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“Over the past year, large numbers of UK consumers have made a permanent shift to online grocery shopping,” said CEO Melanie Smith.
“Ocado Retail is best-placed to serve these customers as we continue to improve the customer experience through the joint venture with M&S, adding new products, offering greater value, and maintaining high customer service levels.
“We opened one mini customer fulfilment centre in Bristol last month, which gives us capacity to serve more customers and with the opening of Purfleet and re-opening of Andover, both later this year, we ultimately expect to ramp our overall capacity by 40% with these sites.”
Covering three-quarters of UK households, Ocado Retail says every shopping bag is carefully packed in one of four distribution centres using market-leading software and technology such as robotic pickers.
Available through apps, it delivers over 50,000 products, including big-name brands, a range of M&S and Ocado own-brand products and a growing non-food selection.
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Tim Steiner, CEO of Ocado Group and Chairman of Ocado Retail, said: “As we progress towards a new normal for grocery retail, and the focus for the industry shifts from meeting unprecedented demand to winning in a large and growing online channel, the need for a fulfilment solution that both delights a more knowledgeable customer, and enables profitable, sustainable growth, has never been more critical.
“This is the solution that Ocado’s partners are now rolling out in many countries across the world. The first international partners to go live, Sobeys and Groupe Casino, have reported a very encouraging customer response and we look forward to the official opening of the first Customer Fulfilment Centres for our US partner Kroger in the coming weeks.
“Ocado Retail, of course, is the most advanced in demonstrating the power of the solution. It has proven that the model consistently delivers the best online customer experience in grocery with leading economics.
“We believe that the prospects for Ocado Retail, as well as our other solutions partners, are very promising.”
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