Ocado reports increased sales as IT replatforming project ‘progresses well’

Ocado said that it is making good progress with a major project to move its IT into the cloud as far as possible, as it reported a 22.5 percent growth in group sales.

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Ocado said that it is making good progress with a major project to move its IT into the cloud as far as possible, as it reported a 22.5 percent growth in group sales.

Ocado has been trying to portray itself as an innovative technology company, rather than just a retailer, as it develops a platform that can be rolled out to deliver online groceries internationally in partnership with third-parties, like Morrisons.

“Development of our proprietary modular logistics solution, replatforming and further enhancement of our technology are all progressing well,” the online groceries retailer said in an interim management statement for the 12 weeks to 10 August 2014.

The company tellingly divided its interim management statement into two updates, one for its ‘retail’ business and one for its ‘platform’ business.

As well as the cloud replatforming update, under ‘platform business’, the company said: “Our existing platform business with Morrisons continues to successfully scale with demand.”

Meanwhile, on the retail side, Ocado said that its specialist kitchen and homewares shop, Sizzle.co.uk, launched in August.

Ocado reported gross sales of £231.9 million, up 22.5 percent from the same period in 2013 (£189.2 million). Average orders per week have also increased, by 17.4 percent, from 139,000 to 163,000. However, the average order size had fallen slightly, by 1.7 percent, from £113.54 to £111.64.

Tim Steiner, Ocado’s CEO, said: “This performance further demonstrates the ongoing shift to online grocery shopping.

“The retail environment is challenging with an increased level of promotional activity and price reductions across the industry. However, due to the strength of our offer, we expect to continue growing sales broadly in line with, or slightly ahead of, the online grocery market.”

Ocado was recently forced to defend the uniqueness of its technology after analysts caused a drop in share value by questioning the value of the company's platform. 

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