Ocado says shoppers buying fewer items as costs rise

Shoppers using online grocer Ocado are buying fewer items as they struggle with the soaring cost of living.

The retailer also said its customers were shopping less frequently as it reported a fall in revenues last year.

Prices are rising at the fastest rate in around 40 years and outstripping wage growth, which is putting household budgets under pressure.

Ocado also said shopping patterns seen during the pandemic - when online sales surged - had begun to "unwind".

Ocado Retail - a joint venture between Ocado and Marks & Spencer - said its revenues fell by 3.8% in 2022 to £2.2bn.

It blamed the fall on "an unwind of pandemic shopping behaviours, accelerated by the onset of the current cost of living crisis".

It added that this meant shopping basket volumes fell by 12.1% last year, or six fewer items, and shopping frequency also declined.

Ocado added that the average value of orders in the three months to the end of November was £117 - a drop of 1.3% compared with the same period in 2021.

However, Ocado said it had enjoyed record festive sales, which were up 15% over the five days before Christmas. On one of the days it received more than 72,000 orders - a record high.

Ocado Retail chief executive Hannah Gibson said the current market was "challenging for everyone", and the retailer is expecting to see lower basket sizes in the first half of this year.

"In 2023 we will continue to strengthen and improve our leading customer proposition, including investing in value to help customers manage cost of living pressures, while keeping tight control of our costs," Ms Gibson added.