Ocado Retail notches up sales growth of 10.6 per cent as it won back customers

Stripping out price growth, sales by volume lifted by 8.1 per cent in the group’s first quarter.

Ocado said its active customer base rose 6.4 per cent to 1.02 million as it “stepped up our efforts”.

But the update comes amid uncertainty over a dispute with retail partner M&S over an outstanding payment.

It was revealed last month that Ocado could take legal action against M&S unless they reach agreement over the final instalment of £190.7m as part of the payment for the £750m 50-50 Ocado Retail tie-up, which was launched in 2019.

Ocado Group boss Tim Steiner said the firm will “most likely” reach a negotiated settlement over the payment.

In its latest update, Ocado Retail said price inflation eased back to 2.2 per cent in the three months, which it said was “significantly” lower than the wider market.

“This has translated to improvements in customer value perception,” according to Ocado.

But the group’s update showed that basket sizes continued to fall in the quarter, down 0.2 per cent, although this was lower than in previous recent quarters.

It has previously put falls in the basket size down to cost-of-living pressures and as shoppers continued to change their buying habits following the pandemic.

Hannah Gibson, Ocado Retail’s chief executive, said: “We have made a strong start to the year, building on the momentum we established in 2023 through the progress of our Perfect Execution programme.

“We are delivering improvements in our proposition for customers, across unbeatable choice, unrivalled service and reassuringly good value. During the first quarter, we stepped up our efforts: enriching our product range with the strong growth of core M&S grocery lines and the debut of Makers Market, using our unique model to showcase small brands; further enhancing slot and product availability; and lowering the price of 1,700 more products in our latest Big Price Drop promotion alongside further expanding the Ocado Own Range.”