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Ocado Group has revealed its losses widened to £500m for the 52-week period ended 27 November 2022, as the online grocer said its retail revenues struggled amid the cost of living crisis.
According to the update, Ocado reported its group revenues remained relatively flat at £2.5bn, however, its retail revenues fell 3.8% from £2.28bn to £2.08bn as it revealed robust customer growth was offset by lower value baskets.
The group also reported an EBITDA loss of £74m, compared with a profit of £61m in FY21, as a result of cost pressures and capacity investments made to support growth at Ocado Retail.
EBITDA at Ocado Retail fell to -£4m, compared with £150m in FY21, which the group said reflects a “combination of near-term pressures offsetting progress”.
It said the most significant of these has been a volume drag resulting from the end of large basket shopping behaviours of the pandemic, and accelerated by the current cost-of-living crisis in the UK.
Tim Steiner, chief executive officer of Ocado Group, said: “Over the last year every company has had its business model tested by a combination of macro-economic and geopolitical headwinds, and I am pleased that, thanks to the creativity and commitment of my colleagues, we have more confidence in our model than ever before.
“…Ocado Retail, our UK JV with M&S, has shown its resilience against a backdrop of higher costs and smaller baskets, reflecting the Covid unwind and the UK cost of living crisis, by growing customer numbers and increasing online market share. As the Covid unwind fades and customer growth continues the business will start to recover the fixed costs of recent capacity commitments.”
He added: “Our strong balance sheet gives us the means to finance our growth through the mid-term (4-6 years) by which time we expect Ocado Group to be cash flow positive with the cash flows from existing CFCs sufficient to finance future investments.
“Over the last twelve months we have continued to deepen our relationships with our partners, and have learnt a lot about how to help them make the most of our world-leading technology. We are confident that we will see the benefits of these learnings in the next few years as we progress our mission to change the way the world shops, for good.”
