06 May 2020
Posted in Coronavirus
Ocado and M&S find a silver lining from the cloud of COVID-19 as revenue skyrockets
Following the news that Ocado Retail revenue rose 40.4% in its Q2 to date (beginning of March to today), Thomas Brereton, Retail Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:
“In a time when few industries are thriving in the face of COVID-19, online grocery is booming; the combination of higher food spend and desire for home delivery means the online grocery market is forecast to grow 25.5% in 2020 (compared to 10.2% in 2019). After struggling to cope with the initial spike in demand in late March, Ocado has taken steps to improve operational efficiency (including stopping the logistically frustrating delivery of mineral water), and the 40.4% growth in UK revenue in Q2 to date will be viewed enviously by competitors that have been slow to adapt to the online channel.
“Furthermore M&S – somewhat of a retail laggard in recent years – is also making gains from this shift in consumer behaviour, having acquired 50% of Ocado Retail just over a year ago with plans (currently unaltered by COVID-19) to replace Waitrose as Ocado’s main supplier later this year. Although the £750m cost to M&S had been questioned at the time as being too pricy, recent events and the subsequent surge in online demand now makes the deal appear incredibly savvy – especially given the woes of its instore food and clothing divisions as the lockdown bites.”