Following today’s release of Ocado’s figures for the 52 weeks ending 1st December 2024; Aliyah Siddika, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Ocado Retail’s ‘Perfect Execution’ strategy drove strong growth throughout the year, delivering more choice and value to customers and improving consumer perceptions. The online grocer reported a 13.9% increase in retail revenue in FY2023/24, surpassing GlobalData’s forecast of 5.2% growth for the UK online food & grocery market in 2024. This stellar performance suggests the grocer gained market share this year. Ocado Retail achieved a positive adjusted EBITDA of £44.6m, marking a £34.2m improvement on the previous year and signalling that its retail division is on track. Nevertheless, with an uptick in inflation at the start of 2025, the online specialist, alongside all grocers in the sector, will need to keep tight control on costs to protect margins.
“The online grocer has significantly improved its customer acquisition this year, with a 12.1% increase in active customers and an 11.8% growth in mature customers (those with five or more orders). This result shows that Ocado is successfully attracting new customers and retaining them. The wide range of products, including the Ocado Own range, smaller brands, and most Marks & Spencer products, is crucial to customer retention. The growing popularity of Marks & Spencer food products, known for their uniqueness, innovation, and high quality, has benefitted Ocado Retail. To ensure continued success, the retailer must maintain and develop its relationship with Marks & Spencer by collaborating on product development to align with the Marks & Spencer and Ocado brands. Additionally, introducing new smaller brands is essential as consumers increasingly seek more options and quality products.
“Ocado Retail’s focus on price has been central to its strong performance this year, with its average selling price increasing by just 0.4%, well below UK grocery inflation levels. Strategic initiatives have aided the online specialist, including its ‘Big Price Drops’ and the ‘Ocado Price Promise’, where 10,000 products have been price-matched with Tesco. These pricing strategies have also positioned Ocado as an affordable and attractive option for shoppers.
“We expect the food & grocery sector to remain highly price-competitive into 2025, and Ocado’s appealing online fulfilment proposition puts it in a strong standing this year. With Ocado expanding its delivery slot availability to accommodate more customers, this will ensure the online specialist is an increasingly convenient option for shoppers. The ‘Smart Pass’ program, offering free delivery and exclusive discounts to members, has also contributed to customer loyalty and increased shopping frequency on the platform in this period and should continue to bolster Ocado’s performance in 2025.”
