- Q1 revenue up 10.6%
- Active customers up 6.4% to 1.02 million
- Average selling price up 2.2%
- Ocado and M&S wrangling over final payment
LONDON, March 26 (Reuters) - British online supermarket Ocado Retail kept its guidance for the year as it reported a 10.6% increase in first-quarter revenue reflecting growth in customer numbers.
The 50:50 joint venture between Ocado Group and Marks & Spencer said on Tuesday that a focus on sharper prices was working.
"We have made a strong start to the year, building on the momentum we established in 2023," CEO Hannah Gibson said.
"Our strategy is resonating with customers and volume growth is building well."
Ocado Retail said average selling price growth in its first quarter to March 3 was 2.2% - below grocery market inflation, which was 5.3% in researcher Kantar's February report.
It lowered the prices of 1,700 products during the period and also added more M&S lines to its range.
Retail revenue in the quarter was 645.3 million pounds ($816.4 million) and active customers rose 6.4% to 1.02 million.
Volume, or total items sold, grew 8.1% to 242.1 million, with average orders per week up 8.4% to 414,000 and average basket value up 2.1% to 125.47 pounds.
Ocado Retail stuck with its guidance for full-year 2023-24 revenue growth of "mid-high single digits percent" and an underlying EBITDA margin of about 2.5%.
Ocado Group and M&S are wrangling over a final payment for M&S's share of the venture which was formed in 2019.
M&S says the business has not met the performance criteria for the payment. Ocado Group says the target should be adjusted and has threatened legal action.
Last month, Ocado Group reported a reduced annual loss and said it would not make a profit at the pretax level for five or six years.
Online's share of Britain's total grocery market was about 7% before the onset of COVID-19 in 2020. It peaked at about 15% during the pandemic but has since fallen back to about 12%, industry data shows.
($1 = 0.7904 pounds)
Reporting by James Davey, editing by Paul Sandle and Jason Neely
Source: Reuters