UK's Ocado Retail posts 17.5% rise in quarterly revenue

By James Davey

LONDON (Reuters) -British online supermarket Ocado Retail reported faster sales growth in its fourth quarter as more competitive pricing helped it win customers from rivals, underlining its position as the country's fastest growing grocer.

During the COVID pandemic in 2020, online's share of Britain's total grocery market more than doubled, peaking at about 15% and is currently at about 12% according to industry data.

Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, said on Tuesday its retail revenue rose 17.5% to 715.8 million pounds ($874.9 million) in the 13 weeks to Dec. 1, after growth of 15.5% in its previous quarter, as the number of active customers increased 12.1% to 1.12 million and they shopped on the site more often.

CEO Hannah Gibson said the business had benefited from "making sure customers can buy all their favourite M&S products, ensuring our service is near perfect, shifting our value perceptions as customers realise how much we've moved on price and helping new customers discover Ocado."

Ocado Retail said its average selling price rose just 0.1% - well below headline inflation - over the quarter.

It also said it delivered its highest ever level of sales over the peak Christmas trading period. It highlighted strong sales of M&S party food from hot honey halloumi to pigs in blankets but did not provide overall sales numbers.

Industry data published last week showed Ocado's sales rose 9.6% over the 12 weeks to Dec. 29, giving it a market share of 1.8%, up 10 basis points on the year.

Shares in Ocado Group were up 12% in early trading, while shares in M&S were flat.

Last week, market leader Tesco, No. 2 Sainsbury's and M&S all reported robust Christmas trading. However, they all flagged concerns about rising costs and the strength of the economy and consumer demand in 2025.

Ocado Retail forecast further progress in its 2024/25 year towards its mid-term target of a "high mid-single digit" adjusted core earnings margin.

($1 = 0.8181 pounds)

(Reporting by James Davey; editing by Sarah Young, Paul Sandle and Tomasz Janowski)