Verdict Research believes that online retailer Ocado needs to 'remain relevant' to its customer base in order to offset the looming threat of Amazon Fresh and other online retailers.
"The emerging presence of Amazon Fresh has yet to make a tangible impact on Ocado sales, however, future successes will be determined by Ocado’s ability to remain relevant and respond to the growing threat," commented Verdict Research analyst Michael Coombs.
"This comes as Amazon’s new partnership with Morrisons will undermine Ocado’s strength to negotiate new partnerships in 2017 and beyond. Ocado should strengthen its brands Fabled and Sizzle and Fetch, which would reduce reliance on food & grocery partnerships and increase its presence and share of better performing sectors."
Coombs was speaking after Ocado posted a 13.1% increase in retail sales in the fourth quarter of the year, to £398.1 million.
"Endemic price deflation in the food sector and a shift in consumer habits away from the big weekly shop have led to average order values decreasing by 2.9%," Coombs added. "However, continued take up of the Ocado ‘Smart Pass’ delivery save scheme has helped to offset these lower order values by increasing the average number of weekly orders by 17.6% to 241,000."
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
