Ocado | Verdict Company Briefing

Ocado is the UK's only pureplay online grocery retailer. The retailer has a partnership with Waitrose which allows Ocado to source Waitrose branded and third party branded products. Capacity constraints at the retailer are hoped to be relieved in Q1 2013 with the opening of a second distribution centre allowing a return to double digit growth as the online grocery market grows

• Benchmark your performance in food & grocery with detailed key performance indicators across sales and space data for Ocado
• As a wholesaler or supplier, identify the unique potential of Ocado as a new retail partner by understanding its specialist range strategy
• Assess the UK online grocery market by understanding the only pureplay operation competitng with the Big Four

Ocado faces the vitally important step in Q1 of 2012/13 of opening its new customer fulfilment centre. It is crucial that Ocado implements the upcoming change smoothly to maintain the confidence of investors and its lenders, the banks.

Providing better service than its rivals remains, to a very great extent, Ocado’s unique selling point. To maintain this, it will have to continue to invest to make sure its systems are better than its competitors and probably sacrifice some margin to make sure operating resources are available to maintain and improve delivery standards.

Checkouts using mobile devices represented 24.0% of Ocado’s orders in H1 of 2011 and it now has apps available for all major mobile technology platforms. As in other areas, its competitors are catching up. Continued investment in its mobile proposition in terms of content and usefulness will help to maintain its competitive advantage.

• How will Ocado continue to grow sales as competition increases online
• What are the key threats and opportunities for this unique retailer
• How will Ocado's market share grow as CFC2 comes into operation

Table of contents

OVERVIEW
Introduction
Summary
Rivals catch up on service and delivery prices;
Ocado's m-commerce lead melts away;
Threat from Waitrose continues to grow;
Extends lower prices;
Still a relative minnow;
Sales growth salckens;
Profit progress made but margins still slim;
So new CFC opening must go smoothly …
… and non-food expansion must be carefully targeted.

OCADO
Verdict outlook
Must return to rapid growth to survive
Recent key events
(Untitled sub-section)
Proposition
Financials
Sales growth slows to a third of its 2010 peak
Current trading
Sector performance – food & grocery
Slowdown in growth a concern
Market shares

METHODOLOGY
Verdict company briefing
Financial information
Market size calculation
Further reading
Ask the analyst
Disclaimer

TABLES
Table: Ocado company information 2012
Table: Ocado retail proposition 2012
Table: Ocado UK key operating statistics 2008–13e
Table: Ocado trading record 2003–13e

FIGURES
Figure: Ocado logo 2012
Figure: Ocado UK sales and growth to December 2008–13e
Figure: Ocado operating profit & loss to December 2006 – 11
Figure: Ocado food & grocery sales in calendar years incl VAT 2008-13e
Figure: Ocado share of total market held by food & grocery retailers 2008–13e
Figure: Ocado share of market in food & grocery products 2008–13e

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