Sales slowed at Ocado (LON:OCDO) for the quarter, after higher demand was offset by a lack of drivers in the London and South-East.
The online supermarket delivery service reported a 11.6 percent growth in revenue in the 14 weeks to December 3 ahead of the crucial Christmas period. Nevertheless, a shortage of delivery drivers threatened to impact profitability.
Overall, retail sales rose to £373.8 million from £334.8 million the same period a year before, as a result of greater capacity at its customer fulfilment centre, located in Andover.
Specifically, average weekly orders rose 11.1 percent to 280,000 from 252,000 and the average quantity of order rose 0.3 percent to £106.11 from £105.83.
“While we continue to report sector leading double digit sales growth in our retail business, a shortage of capacity, with the lack of drivers in certain locations being the largest factor, restricted our sales growth,” Chief Executive, Tim Steiner commented.
“While this driver shortage has now been largely resolved, there was some short-term impact on average orders per week over the period.”
Looking ahead, Steiner added:
“Building scale and capacity in the UK will support the sustainable growth of our retail business, enabling us to take further market share in online grocery, and we look forward to the coming year with confidence”.
The company was floated on the London Stock Exchange back in 2010, and is a constituent of the FTSE-250 index.
Ocado employs about 12,000 people, half of which are drivers. Its products include its own brands as well as the John Lewis Partnership’s Waitrose groceries.
However, the company is set to face more competition in the online supermarket arena, with Marks and Spencer (LON:MKS) announcing earlier this year its intention to start a delivery service.
Nevertheless, Marks and Spencer are encountering their own difficulties, with persistently poor performance across its clothing and home division.
Shares in Ocado are currently trading up 3.39 percent as of 10.39AM (GMT).