Ocado says retail landscape changing for good

The landscape for food retailing is changing for good.

That's according to British online grocer and technology group Ocado.

It reported a 69% jump in annual core earnings on Tuesday. (February 9)

Boosted by stuck-at-home consumers generating huge demand for deliveries.

The increase reflected revenue growth of 35% at Ocado Retail - the joint venture between Ocado and Marks & Spencer.

That offset a negative contribution from Ocado's overseas technology arm due to additional costs associated with faster growth and accounting rules.

Shares in Ocado have more than doubled over the last year.

Giving the group a stock market capitalisation of almost $29 billion - nearly four times the value of Sainsbury's, Britain's No.2 supermarket group by sales.

The attraction of home delivery has paid off, but so too has demand globally for its state-of-the-art robot-operated warehouses.

In 2020 Ocado opened its first Customer Fulfilment Centres for Casino in France and Sobeys in Canada.

It also has deals with groups in the United States and Japan.

Ocado's earnings rose to $101 million in the year to the end of November.

It said retail revenue growth for this year would be highly dependent on the length of restrictions.

Shares in the company were down around 2% by early afternoon, reflecting a planned hike in capital expenditure.

And an expectation of increased international technology losses as investment is stepped up.