A fire at one of its high-tech warehouses yesterday dealt a blow to Ocado, on the same day that it reported a rise in annual losses and announced a new one-hour delivery service (The Times £). Ocado’s boss Tim Steiner has stayed tight-lipped on a potential tie-up with Marks & Spencer as the online grocer unveiled a new one-hour delivery service and widening losses (The Telegraph). UK online supermarket Ocado has said it expects revenue from its retail operations to grow by 10% to 15% this year but warned spending on distribution centres it is building for other supermarkets would continue to affect profit (The Financial Times £). Ocado saw revenues and customer numbers increase last year, but losses have widened as it was weighed down by investments in its warehouses and the logistics technology it licenses to retailers (The Daily Mail).
A huge fire that swept through an Ocado robotic warehouse in Hampshire has been brought under control more than a day after it broke out (The Guardian).
Ocado bosses’ pay almost trebled last year despite losses at the online supermarket swelling to £45m. (The Daily Mail)
Alistair Osborne in The Times (£) writes: “Ocado’s a long way from demonstrating that it will ever be a money-spinner. Yet, it’s being valued at 4.5 times sales: a premium to Amazon on 3.4 times. And Amazon made $10 billion net profits last year. As valuations go, Ocado’s looks to be biting off more than it can chew.”
The Guardian’s Nils Pratley writes: “Steiner’s latest experiment is Ocado Zoom, offering delivery within an hour and a range of 10,000 products. Zoom still has to be shown to work profitably but, in terms of ambition, it is streets ahead of Amazon’s equivalent food operation in the UK.” (The Guardian)
“Luckily, tech investors care little for profitability,” writes the FT. Its share price jumped 4% to almost 4 times sales, an all-time high. As Ocado pushes out its technology, further losses should be expected. Investors should also ask whether the company’s cash balance, topped up from £300m of new equity raised last year, is enough to see it through to sustained profitability. (The Financial Times £)
The new chief executive of Unilever, the FTSE-100 consumer goods giant, has clinched the first deal of his tenure by agreeing a cut-price takeover of Graze, the snacking brand sold in thousands of supermarkets (Sky News). Unilever has snapped up Graze, the healthy snacking brand, as it continues its “bolt-on” acquisition strategy focusing on fast-growing companies (The Times £). The company did not disclose how much it paid but a person with direct knowledge of the transaction said Unilever paid below £150m for the business (The Financial Times £).
The grocery market has been lifted by a surge in veganism, as health-conscious shoppers turned their backs on Christmas excess to splash more than £40m on fruit and veg at the start of the year (The Telegraph). People in the UK ate 150 million more meat-free dinners last year than in 2017, new figures suggest (Sky News).
The chairman of Patisserie Valerie has said he is considering suing its former auditor after a £40m accounting black hole pushed the cafe chain into administration. (The Daily Mail)
Political uncertainty is choking off growth in the UK economy, with activity slipping to its weakest for six years as companies delay projects and hold off placing new orders (The Financial Times £).
Russian billionaire Mikhail Fridman has offered to buy Dia Group in a deal that gives the struggling Spanish supermarket chain an equity value of €417m, a deep discount from its €2.7bn valuation at the end of 2017. (The Financial Times £)
The bid price looks cheap, writes The FT. The offer of 67 euro cents per share it does not own is less than 20 per cent above the three month average. Even modest cost cutting would justify L1 paying more. (The Financial Times £)
A shopping centre in Scotland that was put up for auction with a starting price of £1 has been sold for only £310,000 (The Times £). A Scottish shopping centre has been sold for about the price of an average house in some areas of the country, in the latest sign of the crisis in UK retail (The Guardian).
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