Ocado Zoom ready to roll in London
Ocado will launch a trial of its one-hour delivery service, Ocado Zoom, in March.
This will involve around 10,000 products, with an initial test site in west London. Ocado Chief Executive Tim Steiner said that the move will “allow us to tap into the sub £60 section of the market”.
The online retailer made the announcement as it reported a sales rise of 12% to £1.48 billion alongside a pre-tax loss of £44.4 million for the year ending 2nd December 2018, compared with £9.8 million in the previous 12 months.
“The investment case for Ocado still looks compelling, thanks to the knock-out deals it has already signed with the likes of Kroger in the US. The growth outlook for the online grocery market is undoubtedly positive, as customers ditch shopping trips and trolleys for the convenience of point and click,” says Fiona Cincotta, Senior Market Analyst at City Index.
“But with Ocado shares trading at stratospherically high multiples, each earnings miss will test investor nerves. All the extra cash being sucked up by the technology platform today may well make for a better offering tomorrow. Unfortunately, we'll have wait until revenue starts flowing from the solutions division to get a better handle of the margins on offer."