Ocado’s automation has not been able to cope compared to the “store-pick” model
Ocado’s weekly orders since the start of M&S partnership averages 328,000
This compares to an average of 345,000 in the weeks leading up the launch, when it was still partnered with Waitrose
Meanwhile, Waitrose’s standalone online grocery service has seen weekly online orders increase 20%
Just before its split with Waitrose, Ocado chief executive Tim Steiner said the upmarket grocer did not have the capacity to succeed in online on its own
Waitrose has reportedly stolen some market share from Ocado during the early days of the latter’s partnership with Marks & Spencer and has stolen an early march on Ocado in the scrap for middle-class shoppers. Prior to September 1, Ocado had a partnership with Waitrose.
Just before its split with Waitrose, Ocado chief executive Tim Steiner said the upmarket grocer did not have the capacity to succeed in online on its own.
According to recent data, Ocado Retail had an average of 328,000 weekly orders in the fortnight after it launched its Marks & Spencer partnership on September 1. In comparison, in the weeks leading up that launch weekly orders reportedly averaged 345,000.
However, in the month since its split, weekly orders from Waitrose’s standalone online grocery service have reportedly increased by 20 per cent – or 190,000 orders – with plans afoot to further increase its capacity.
It’s thought that the surge in demand for online grocery during the pandemic had thrown a curveball to Ocado, as its automated distribution facilities have not been able to cope compared to the “store-pick” model used by the bigger grocery chains.
Despite being in the vanguard of online grocery, Ocado’s capacity constraints have caused it to lose share in the pandemic, during which overall online sales have leapt from 8% to 13% of the total UK grocery market.
Ocado's capacity has grown more slowly than Waitrose and other competitors as it can only expand by building more robotic warehouses, but it remains Britain's fastest growing supermarket by sales.
Meanwhile, Big 4 leader Tesco had doubled online delivery slots to 1.3 million at the height of the pandemic, further eating away at Ocado’s market share in online grocery.
Despite this, in mid-September Ocado’s market capitalization topped £20 billion – trailing behind Tesco by just £2 billion.
Credit Suisse also previously said that Ocado had increased sales by two thirds to reach more than £600 million in September and forecast sales of over £2 billion within 12 months if it continued at this rate under the M&S partnership.
Ocado recently revealed plans to increase its capacity by 40 per cent by 2021.
