Ocado narrowed its losses last year as it benefitted from a strong performance in its grocery arm.
Ocado’s revenue was up 14.1% to £3.2bn in the year to 1 December, with operating losses falling 4.9% to £374.5m.
Ocado said sales in its retail business, a joint venture with M&S, jumped 13.9% in the period to £2.69bn, driven by a 12.5% rise in weekly orders.
“Ocado Retail in the UK continues to lead the way as consistently the fastest-growing grocer in the market and reaching one million active shoppers for the first time,” said CEO Tim Steiner.
The group’s biggest improver, however, was its technology arm where revenue rose 18.1% to £497m, helped by three new CFCs going live in Sydney, Melbourne and Madrid.
The group also highlighted its new Luton CFC, which is now rolling out its new Re:Imagined technology. Ocado says the kit will allow 70% of all items to be picked robotically, reducing labour costs by over 100bps of retail sales.
Tim Steiner said last year saw the company deliver a shift in the potential of robotics and automation and started rolling these out across its global partners.
“This marked a milestone for our technology, with the already market-leading productivity of an Ocado CFC almost doubling over the course of a decade.”
With online driving the greatest growth in the global grocery market, “our partners are well set up to take advantage of this growth with Ocado’s technology, and we have a strong prospect pipeline across grocery, non-grocery and logistics”.
However, there remain concerns over the sustainability of Ocado’s growth, especially after Morrisons ditched its CFC in November in favour of a store-pick model.
Morrrisons has been working with Ocado since 2013, sharing capacity with the online pureplayer at two of its customer fulfilment centres in Dordon and Erith.
The shift by one of Ocado’s key UK partners raised questions about the long-term growth potential of its domestic logistics business.
In October, Ocado Group appointed technology veteran and former Avanade CEO Adam Warby as its chair.
Warby was a founding member of the IT consulting and services business Avanade Corporation, and served as its CEO for 11 years.
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