July 2, 2013, 11:31 AM

Sales increase 15% for online grocer Ocado in the first half of 2013

The UK-company also strikes a deal with another grocer.

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With sales up 15% in the first half of 2013, Ocado eyes a deal with Morrisons.

Sales in the first half of 2013 are up 15.5% for United Kingdom-based Ocado Ltd. The online grocer also is expanding its fulfillment services in a deal with grocer Wm Morrisons Supermarkets Plc.

For the first half of 2013 ended May 19, Ocado, No. 19 in the Internet Retailer Europe 500, reported:

  • Total sales of 355.9 million pounds ($539.9 million), up 15.5% from 308 million pounds ($467.3 million) in the same period a year ago.
  • A net loss of 3.8 million pounds ($5.8 million), a reversal from a profit of 200,000 pounds ($303,424).
  • An average of 139,000 orders per week, a 13.9% increase from 122,000 orders per week.
  • At the end of the year, the merchant says it had 360,000 active customers, a 6.8% increase from 337,000 in the same period a year earlier.
  • Ocado distributed an average of 158 orders per van per week, up 5.3% from 150 orders.
  • Average order size was 114.90 pounds ($174.30), a 1.6% increase from 113.10 pounds ($171.60).

Ocado also announced a 25-year deal with Morrisons that enables Morrisons.com to sell groceries online. Ocado will provide technology and services support, and Morrisons will invest 218 million pounds ($330.7 million) in an Ocado fulfillment center to accommodate Morrisons product range, pay for handling equipment and integrate the companies’ computer systems.

“From a standing start, Morrisons will be competing in the fast-growing online channel by the end of this year with a really compelling proposition,” says Dalton Phillips, Morrisons chief executive. The Morrisons deal is the first in which Ocado will deliver web orders for another supermarket. Ocado says the deal is validation of its business model to license its web and fulfillment technologies to other grocers with the potential to act as a template for other deals.

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