Shares in online supermarket Ocado (OCDO) rise 4.4% as the decline in its average order size is slower than expected.
Average orders are down 1.6% to £110.84 for the 13 weeks to 26 February. That is an improvement on the 2.9% fall in the 12 weeks to 21 February 2016.
The company attributes the decline to fewer multi-buy promotions and increasing users of Ocado’s Smart Pass, which promotes more frequent shopping and customer retention.
Chief executive Tim Steiner has hinted that low prices behind recent supermarket wars may come to an end as a weaker pound pushes up prices.
In January, Shares explored why Ocado has divided opinion among brokers despite robust trading.
Management is upbeat about gross retail sales, which jumped approximately 13% from £311.6m to £352.4m in the 13 weeks to 26 February, compared to the comparative period in 2016.
ETX Capital analyst Neil Wilson is impressed by the company’s sales growth.
He says: ‘In a tough market, this is no mean feat and Ocado continues to grow ahead of the online grocery market and well ahead of the market overall.’
However, the analyst is sceptical about the online grocer achieving higher profit without its ‘much-hyped’ international deal.
Ocado said in February 2016 that it expected to sign deals in multiple territories for its proprietary technology. It has yet to secure an actual contract outside of the UK.
The prospect of international expansion has been discussed by the company as far back as 2014.
