From The Telegraph:
Ocado has posted a jump in its first quarter sales but failed to provide an update on its renegotiations with Morrisons or its postponed overseas technology deal.
The online grocer, which also sells Waitrose goods, posted a 13.8pc rise in sales to £252m during the 12 weeks to 21 February.
"We are pleased with the steady progress in our business, maintaining double digit sales growth in a retail environment that remains challenging, and post period end we shipped over 250,000 orders in a single week for the first time”, said Tim Steiner, chief executive.
The average number of orders a week also rose by 16.9pc during the quarter to 214,000. However, the cost of an average basket fell for the tenth quarter in a row by 2.9pc to £111.41*.
So what if the average order size fell? Stick those numbers in a spreadsheet and work backwards, you could say that Ocado's retained its existing 191,600 weekly orders @ £115 each, and added another 22,400 @ £83.
This might well be an example of price skimming, i.e. early customers are prepared to place larger orders, so if Ocado then drops its delivery charges, it can gain additional customers for whom it is worthwhile placing slightly smaller orders. As long as the new smaller orders are still profitable, then good for Ocado.
* I'm not sure that's even true. In September 2014, Reuters reported as follows:
British online grocer Ocado reported gross retail sales rose 15.5 percent in its fiscal third quarter but average order size fell as competition increased in the business. Gross sales rose to 218.5 million pounds ($354 million) in the 12 weeks to Aug. 10, compared with a rise of 15.6 percent in the first half, while average order size fell 1.7 percent to 111.64 pounds.
On a related note, Her Indoors mentioned recently that Tesco have higher delivery charges depending for more convenient delivery times. My son (who is good as spotting these things) pointed out that this was just like airline tickets - very early and very late flights are much cheaper. I inevitably added that this was a pure rental charge.
Wednesday, 16 March 2016
From The Telegraph:
My latest blogpost: Ocado - Fun With NumbersTweet this! Posted by Mark Wadsworth at 18:22