Ocado at a glance

Established in 2000 and listed on the London Stock Exchange in July 2010, Ocado is the UK's, and the world's, largest dedicated online grocery retailer providing and delivering quality groceries and other products directly to customers' homes. Our objective is to be more than a supermarket, improving the experience for our customers allowing them to "feel good shopping", while building a business that will deliver attractive financial returns.

we are
  • The world's leading online only grocery retailer
  • Challenging the traditional retail business model
  • Cash generative
  • Cashflow covers interest and replacement capex
  • Investing for future growth
  • Carefully investing to secure our future growth and investor returns
we have
  • A significant market opportunity
  • Huge grocery market and rapidly growing shift into online grocery shopping
  • A unique business model with specific structural advantages
  • Centralised stock picking model driven by technology
  • A superior offer to customers which drives online adoption
  • Wider range, competitive prices and superior service
  • Propietary intellectual property ("IP") creating a "best in class" operation
  • Our own software and know-how powers our operation and sets us apart from our competition
  • A completely scalable business with considerable inherent operational leverage
  • Operational leverage converts into margin as we scale the business
we plan to
  • Create a virtuous cycle of sustainable growth and profitability
  • Increasing scale drives growth and returns, which can be reinvested to continue fuelling growth and improving profits
  • Further enhance our offer to customers to drive growth
  • Drive the "feel good shopping" experience for customers
  • Leverage our technological know-how
  • Utilise technology to improve the customer experience, growth, profitability and develop the business
  • Deliver additional value from our IP
  • Monetise our proprietary IP platform to enhance investor returns

Marketplace and business model

Ocado operates in a very large, but competitive, UK marketplace. According to IGD over £163 billion was spent in the UK grocery market in 2012, with food and grocery representing 54p in every £1 of retail spending. The financial pressures on consumers has increased the importance of creating a differentiated offer which is understood and is attractive to customers.

We are an online only grocery retailer. While customers have been slower to adopt online for their grocery requirements than in other general merchandise categories, online is increasingly important to grocery shoppers. Various market estimates suggest 4-5% of food and grocery sales are now made online. Faster broadband speeds, improved customer interfaces and better service provision has supported this growth.

Grocery retail is dominated by the large store formats (hypermarkets, supermarkets and superstores) which account for over 65% of sales. Common to all formats across the sector is physical store space, with increasing space driving growth historically.

We utilise a different business model, built on technology and logistics skills rather than real estate, to fulfil orders. We invest in this platform to deliver an ever more compelling proposition to a wider set of customers, and to drive growth through the creation of a virtuous cycle of investment, customer demand and financial return. We take significant costs out of the traditional grocery retail business model. This allows us to invest in a market leading fulfilment and delivery service for our customers, and build a sustainable, profitable business for our investors.

Where we operate

Ocado delivery area covers over 70% of UK population.

Ocado marketplace

Our reach and delivery area now covers over 70% of the UK population. We fulfil orders from our centralised Customer Fulfilment Centres in Hatfield ("CFC1") and Dordon, Warwickshire ("CFC2"). From these CFCs we directly deliver orders to local catchment customers, with the remainder of orders being "shipped" to spoke sites, from where local delivery takes place.

Key

CFC

Spoke