Ocado Retail sees sales drop: pre-COVID habits

Consumer demand for digital convenience may continue to rise, but online grocery channels are still far from a safe bet. Retail businessThe joint venture between Hatfield, UK-based grocery technology company Ocado Group and London-based retailer Marks & Spencer has seen its performance decline in recent months.

The company said in a business statement Thursday, March 17 that revenue declined 5.7% year-over-year in the first quarter of 2022. In a statement, Melanie Smith, CEO of Ocado Retail, attributed this down to the normalization of pandemic trends as consumers returned. to their life away from home.

Notably, adoption continued to grow, with orders per week increasing by 11.6%. However, the fact that consumers are placing more orders has its downsides, as those orders are decreasing. In fact, the average basket size is down 15% year over year. Considering the cost of delivery labor, small orders make it more difficult for the model to operate economically.

“Long term, we are confident that the growth trajectory remains positive,” Smith said. “This growth is supported by our quality customer service and high customer satisfaction…and made possible by our investment in new hyper-efficient automated customer fulfillment centers that offer wide ranges, the freshest products and the best delivery. in time to market…to our growing number of UK customers.

In numbers

The online grocery market in the UK is significantly more mature than in the US, according to data from the November 2020 study1 “What UK Consumers Expect From Their Grocery Shopping Experiences”, a PYMNTS study and ACI in the world collaboration. The study, which is based on a September 2021 survey of more than 2,500 UK consumers about their shopping habits, found that 52% say they buy groceries online more often than before March 2020.

Related News: 52% of UK consumers shop online more than they did in 2020

What’s more, the report found that around one in three UK consumers prefer shopping online to shopping in stores, a far higher share than the 18% of US consumers who prefer the same. The UK’s most popular online grocery channel buys online and has products delivered to their doorstep, with 26% of shoppers rating it as their favourite. In contrast, US consumers favor buy-online, pick-up-in-store (BOPIS) options.

What insiders are saying

“I think it is [online grocery is] something we are going to see long after the pandemic is over,” Madeleine Aufseesera leader in omnichannel grocery stores and pharmacies at ACI Worldwide, told PYMNTS in a December 2021 interview. and COVID has forced a seismic shift in their adoption of technology.…Consumers are embracing it because it’s really easy for them to shop online, and they don’t have the patience anymore [for] stores… I think we’re going to see a growth of space.

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