Ocado has had to deploy some of its own lorry drivers to deliver for suppliers in order to keep goods flowing to its warehouses.
CEO Tim Steiner said the business itself was coping well with the ongoing lorry driver shortage, but some suppliers were struggling.
“We are managing very well internally inside our business,” he told The Grocer. “We have our own team and they are capable of doing all the runs we need to do.
“Some of our suppliers are obviously affected by the shortage and we are helping some of them out where possible with our own team. We are absolutely trying to minimise the effects to our end customers.
“We are helping out where we can and trying our best to make sure we get all the deliveries we want to our facilities.”
The online grocer is also holding more stock than usual to shore up availability levels.
Ocado chief financial officer Stephen Daintith said: “We’ve built up inventory levels just as a precaution. So that’s another way we’re addressing the issue.
“We’ve got slightly higher stock levels than we would normally have. We’ve got about 18 days’ [worth]. Normally we have about 16 days’.”
The shortage of HGV drivers, blamed on many repatriating to Europe and not returning, has been estimated at 100,000 nationally by the Road Haulage Association. In recent weeks the impact has been felt across the grocery retail sector from independent c-stores to Tesco.
The government has so far resisted calls from haulage bosses for emergency measures, including issuing temporary visas to HGV drivers in the EU and EEA.
Steiner and Daintith commented on the shortage as they announced Ocado’s half-year results this morning.
“We acknowledge there is a shortage nationally and obviously hope something is done about it but overall we’re managing well,” said Steiner.
Steiner also said wider recruitment had become a bigger headache recently. “It is harder right now to recruit than it has been for a significant time, as the economy has reawakened,” he said.
“And I think every business in the UK has more vacancies today – those that are expanding have got more vacancies today than they would normally expect to have.
“We work hard at it and we expect to be successful, but it is tougher than it was before.”
Meanwhile, the business had noted a shortage in basic construction materials, which has been widely blamed on import delays and a boom in residential building work. “There is a shortage of materials,” said Steiner. “They’re scarcer than they were, but there’s nothing we haven’t been able to find or find a replacement for in order to carry on with our [customer fulfilment centre] programme.”
Alongside its trading update, Ocado announced a partnership to supply its online fulfilment technology to Spanish grocer Auchan Retail.
The update said group revenues were up 21.4% to £1.3bn in the 26 weeks to 30 May 2021, with growth across all business segments.
Retail revenues were up 19.8% in the six-month period to £1.2bn, driven by strong new customer and order growth as Covid-19 restrictions eased.
Steiner revealed the business was adopting a flexible working policy which would allow staff to “work from anywhere” for one month a year.
“During the course of the year, they get an opportunity to choose where they want to work from and do not have to appear in the office for a month and they can do that overseas,” he said.
No comments yet