Ocado growth plateauing after the pandemic

Online grocery was one of the big winners during the pandemic. As the societies have opened up, many online grocers have seen growth stall or even decline.

Ocado is a great example of an online grocer, which has seen huge growth compared to pre-pandemic levels, but has not managed to keep up the pandemic sales volumes. One explanation is that the customers have gone back to stores and thus online grocery revenues have come down.

However, it is not the whole story. It seems that Ocado has not been able to match the growth of the market. Ocado’s revenue for the last 13 weeks has declined by -4%. From 2019 levels Ocado has grown +31,6%. The market has grown almost 100% since 2019.

Ocado had severe challenges in scaling up their order volumes at the pace of the market growth. Ocado has increased it’s order volumes by 14% since 2019, whereas Tesco was able to grow its volumes from around 500 000 to 1,2 million deliveries per week.

Ocado has been busy building up new delivery capacity that will open up during the next two years. All new Fulfilment Centers that are being built will increase the capacity to around 700 000 orders per week. A bit more than half of Tesco’s online capacity.