Ocado says M&S products are a hit after switch from Waitrose

Grocery sales growth in the UK slowed for the second month in a row in August, according to new data from Kantar

Ocado has said more shoppers are buying Marks & Spencer products in the two weeks since it launched its joint venture with the retailer than they bought Waitrose goods before the switch.

The online grocer's sales jumped by more than 50pc for the three months to the end of August as demand for home delivery remained robust after lockdown.

Finance chief Duncan Tatton-Brown said the swap was smooth despite customers complaining they could not place orders on the day. 

“It was a pretty massive transition for us to stop selling [Waitrose] overnight,” said Tatton-Brown. “Everything went well.”

He hailed it as a historic moment and said shoppers were buying M&S groceries as well as toiletries and household items. 

Revenues climbed 52pc to £587.3m for the 13 weeks to Aug 30, compared to the same period last year, while the average number of orders Ocado received per week rose by almost 10pc to 345,000.

The company said: “Demand for the new range [is] driving both an increase in the number of products in customer baskets and strong forward demand.”

Ocado's initial range of 4,400 M&S food products replaces around 4,000 Waitrose items, and it will add a further 800 to the range in the run-up to Christmas. It also currently sells around 700 M&S home and lifestyle products on its website. 

Analysts at Peel Hunt said the popularity of M&S goods “counters the bearish point that customers would turn off once Waitrose left the site”.

Melanie Smith, who runs the Ocado-M&S division, said the aim was to increase capacity by 40pc through to 2021. The online supermarket was overwhelmed at the peak of the crisis as Britons flocked to its website

Full-year profits are now expected to come in at £40m. Ocado's shares surged almost 8pc to £25.42. M&S shares climbed over 3pc higher to come close to £1.09.

Supermarket sales suffer slowdown

Ocado's update came as grocery sales growth slowed for the second month in a row in August. Shoppers returned to restaurants for the Eat Out to Help Out scheme and resumed more normal daily routines. 

Take-home sales rose by 10.8pc during the past 12 weeks, but growth slowed to 8pc in August, according to new data from Kantar. 

Kantar's Fraser McKevitt said: “Fewer meals eaten at home meant consumers spent £155m less in the supermarkets in the four weeks to Sept 6 compared with July. Alcohol sales dipped month on month, with wine down 5pc and beer down 10pc, as the scheme encouraged people to swap Zoom catch-ups for their favourite bars and restaurants.” 

However, regions with tighter Covid restrictions continued to see higher supermarket spending. 

For example, sales at Co-op rose by 13.4pc during the period, but increased by more than double that rate in the North of England, where local lockdowns meant consumers continued to shop closer to home.

Online grocery sales rose by more than three-quarters over the last four weeks compared to last year, Kantar said. However, growth slowed for a second month in a row in August. 

Are you using Ocado following the switch to M&S? Let us know in the comments section below.