Ocado stretched by growing sales


    4 March 2011
    Last updated at 06:52 ET

    Ocado has said it plans to make big increases in capacity to meet burgeoning demand.

    The firm has already opened a new depot in Bristol, with another to follow in Wimbledon and a major expansion of its key Hatfield site also planned.

    The news comes as Ocado saw sales rise 25% in the 12 weeks to 20 February compared with a year ago.

    Even so, capacity constraints meant a lot of demand went unmet, according to the company’s chief financial officer.

    “[Demand] is very significantly greater than the rate of growth we are currently observing,” said Andrew Bracey, noting that many customers had failed to place orders online because delivery slots were unavailable.

    The new Bristol depot in Ocado’s distribution network means the company can now reach 70% of UK households, including those in South Wales for the first time, according to the company’s statement.

    Other improvements are expected to deliver a 25-30% increase in capacity this year.

    The investment is needed, according to Mr Bracey, as the company’s customer base expands into medium and lower-income households.

    Ocado primarily delivers groceries from John Lewis subsidiary Waitrose, and signed a 10-year delivery contract last year with the supermarket chain.

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    Ocado stretched by growing sales