Ocado has announced its trading update for Q2 and business response to coronavirus (COVID-19). In Q2, retail revenue was up 40.4% year-on-year (YoY), compared to 10.3% YoY growth in Q1.
Impacts of COVID-19
Following significantly increased demand at the start of the outbreak, Ocado announced the number of items per basket appears to have passed its peak, whilst remaining high. The share of fresh and chilled products, relative to ambient, is also returning to normal as the retailer sees more normal shopping behaviours return.
Safety and colleague responses
Ocado has rolled out a number of safety and colleague initiatives in response to the coronavirus outbreak. For example, the retailer introduced contact-free deliveries to customers’ doorsteps. It is also carrying out temperature monitoring at all its customer fulfilment centres (CFCs), along with regular testing of frontline staff for coronavirus. Ocado said it is giving front line colleagues a 10% bonus to recognise their contribution during this period.
Ocado said its mature CFCs are running at their peak and best efficiencies. For example, its Erith CFC is currently processing 110,000 standard sized orders per week, compared to 80,000 at the end of its first quarter. The retailer’s Ocado Zoom site in West London has reached end game capacity a year ahead of its original plan. The decision to suspend delivery of mineral water (bulky products that reduce van utilisation) has also enabled Ocado to deliver to 6,000 additional households per week.
Ocado Solutions is supporting its partners, such as, Morrisons which is benefitting from additional capacity at the Dordon CFC and use of Ocado’s Smart Platform for in-store fulfilment. Combined with support for Ocado Retail, the retailer said it is enabling delivery of more than 40% more groceries in the UK than before the impact of the virus.
Ocado Solutions launched its first international CFCs in partnership with Groupe Casino and Sobeys. Groupe Casino’s facility opened at Fleury-Merogis to the south of Paris in March, whilst Sobeys rolled out a test launch of its facility in Ontario in April.
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