Ocado’s Retail Business Grows as Company Focuses on Tech

(Bloomberg) -- Ocado Group Plc‘s retail business keeps steaming ahead as the U.K. online grocer counts down a year to the launch of its partnership with Marks & Spencer Group Plc.

• Retail revenue grew 11% for the 13 weeks through Sept. 1, even though the average order size was down slightly. The company kept its projection for 10% to 15% full-year retail revenue growth.

Key Insights

• Ocado’s home-delivery business keeps growing despite a tough retail market and the company’s move to focus on its technology and logistics operations. It agreed to sell half of its retail business to Marks & Spencer earlier this year.
• The company reassured investors that a fire at its warehouse in Andover, England, has had minimal impact on the business. It loosened its partnership with U.K. grocer Wm Morrison Supermarkets Plc in May as a result of the incident.
• The company gave no updates on the technology arm, which has invested in automated meal preparation and vertical farming recently. After the M&S deal, that’s the side of the business investors are watching more closely.

Market Reaction

• Ocado shares were down 0.6% early Tuesday in London. The stock has risen about 70% this year.

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• Read the statement here.

To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

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