Ocado sales hit by summer celebrations

Ocado, whose range includes products supplied by upmarket grocer Waitrose, said its sales rose 9.9 per cent to £162.6m in the 12 weeks to August 5.

That compares with a first half rise of 12 per cent.

Ocado, which suffered a string of profit downgrades last year, cautioned in June that the Jubilee events had impacted trading, but said it still expected sales growth in the second half overall and added that it anticipated an increase in the rate of sales growth in the fourth quarter.

Ocado shares have had a roller coaster ride since floating at 180 pence in July 2010. They hit a low of 52p last December but rose to a 12-month high of 134p in March as hopes were raised it had got to grips with bottlenecks at its distribution centre at Hatfield.

June’s update prompted another reversal and some analysts have raised concerns that Ocado could breach its banking covenants.

The stock closed Wednesday at 67.2p, valuing the business at about £352m.

Ocado, founded in 2000 by three former Goldman Sachs bankers, has polarised opinion like few other market debutants.

Fans point to rapid growth in online grocery sales and to its high customer service ratings, but sceptics think its model of filling orders from a central depot will never be as profitable as online operations at established grocers, which mostly pick orders in store.

They also fear Ocado is facing growing competition from Waitrose itself, which has started selling groceries online in Ocado’s heartland in and around London.