Shoppers reduce their spend at Ocado as cost of living bites

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Online supermarket Ocado has said Hopper has cut its spending as they try to offset rising cost of living.

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The average basket that customers checked out dropped 6% to £116 in the 13 weeks to the end of August, and has since shrunk even more rapidly.

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Ocado said a large part of the change was due to customers switching to cheaper alternative products.

Chief Executive Tim Steiner said: “We remain focused on providing Okado retail customers with the best possible value to help them navigate the crisis of cost of living, and are encouraged by positive underlying trends in the business that underscore Okado’s differentiated value proposition to customers.”

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Meanwhile, businesses are also feeling the pinch, warning of an additional £20 million to £25 million hit from their annual electricity and fuel bills.

Okado said electricity prices have tripled, while fuel has increased by 15%.

The cost of dry ice – critical to cooling its products – has also risen and will add between £15 million and £20 million to its annual bill.

The owners said they were exploring alternatives to dry ice, but added that increased costs are likely to impact supermarket profits in the fourth quarter.

However, on the upside, the order book looks healthy, with the number of orders per week increasing by almost 11% to 374,000 from a year ago.

It shows that a record number of new customers are using the company — active customer numbers increased 23% year over year to 946,000.

Third quarter sales rose 2.7% to £532 million as a result, and are up 42% from before the pandemic.

Okado said even stronger growth is expected in the fourth quarter.

Mr. Steiner said: “As we have seen in the third quarter, customer numbers have grown rapidly as consumers either switch from other providers or try online grocery for the first time; the built-in productivity and last mile in fulfillment The improvement continues.”

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