Online retailer Ocado is set to overtake Sainsbury’s to You in turnover in the next few months, according to chief financial officer Jason Gissing.
He said Ocado had achieved 300% sales growth this year and was set to be taking £1.5m a week by the end of the year.
The plan is to at least double that turnover next year.
“Sainsbury’s to You saw 35% annual growth. We did 35% in the last six weeks,” he claimed.
Systems and processes have been shaken up at Ocado since August to improve productivity and the accurate delivery of orders, said chief executive officer Tim Steiner.
Some £5m in costs has been saved. For example packers are now able to pack the orders of eight customers simultaneously, rather than individually.
Ocado also takes half of its deliveries direct from suppliers, and plans to take less and less through its retailer partner Waitrose, so it can keep cutting costs. Steiner claimed Ocado’s model of depot-based fulfilment was the only method of online shopping which could ever be profitable.
Five of the 12 floors at Ocado’s 1.2 million sq ft purpose-built Hatfield distribution depot are now operational. Some 40% of Ocado orders are delivered locally from the depot, and 60% through spoke distribution centres in
Rugby, Weybridge and Aylesford in Kent.
Steiner admitted that setting up Ocado had been been costly. “People like to pull out the £70m losses. It’s a set-up cost we have always been very conscious of. It is not a surprise that we have to spend this much money to get where we are today,” he said.
“We are competing with Sainsbury and Tesco - these are household brands.”
The company, in which Waitrose has a 42% stake, will be breaking even operationally in the next year, Steiner said.
“We have the most successful picking on the market.
“I can’t see Tesco’s numbers but we are keeping customers the happiest, we have the lowest churn and we are the most successful in terms of growth.”
Sainsbury does not publish figures for its online business, but Tesco reported that in the year to February 22, Tesco.com sales were £447m with profits up from £0.4m to £12.2m.
Anne Bruce
He said Ocado had achieved 300% sales growth this year and was set to be taking £1.5m a week by the end of the year.
The plan is to at least double that turnover next year.
“Sainsbury’s to You saw 35% annual growth. We did 35% in the last six weeks,” he claimed.
Systems and processes have been shaken up at Ocado since August to improve productivity and the accurate delivery of orders, said chief executive officer Tim Steiner.
Some £5m in costs has been saved. For example packers are now able to pack the orders of eight customers simultaneously, rather than individually.
Ocado also takes half of its deliveries direct from suppliers, and plans to take less and less through its retailer partner Waitrose, so it can keep cutting costs. Steiner claimed Ocado’s model of depot-based fulfilment was the only method of online shopping which could ever be profitable.
Five of the 12 floors at Ocado’s 1.2 million sq ft purpose-built Hatfield distribution depot are now operational. Some 40% of Ocado orders are delivered locally from the depot, and 60% through spoke distribution centres in
Rugby, Weybridge and Aylesford in Kent.
Steiner admitted that setting up Ocado had been been costly. “People like to pull out the £70m losses. It’s a set-up cost we have always been very conscious of. It is not a surprise that we have to spend this much money to get where we are today,” he said.
“We are competing with Sainsbury and Tesco - these are household brands.”
The company, in which Waitrose has a 42% stake, will be breaking even operationally in the next year, Steiner said.
“We have the most successful picking on the market.
“I can’t see Tesco’s numbers but we are keeping customers the happiest, we have the lowest churn and we are the most successful in terms of growth.”
Sainsbury does not publish figures for its online business, but Tesco reported that in the year to February 22, Tesco.com sales were £447m with profits up from £0.4m to £12.2m.
Anne Bruce
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