A Brief Note On The World's Leading Online Grocery Retailer

1656 Words7 Pages
Ocado, the world’s leading online grocery retailer, has been elected the best online supermarket in the UK since being founded in early 2000 by Tim Steiner, Jason Gissing and Jonathan Fairman. (Hall, 2010) With the rapid expansion, Ocado develops and operates a unique business model which only focuses on customers’ online shopping and emphasises the partnership with Waitrose. There are ranges of products offered in Ocado, including the own brand groceries from the Waitrose supermarket chain; and a range of Carrefour 's products. Ocado is aiming at improving the customers’ shopping experience and changing the way people shop for groceries. “The strategic objective of Ocado Group plc is to align the interests of customers, investors and…show more content…
The business had focused on revenue (up to 17 per cent) rather than GPM by lowering prices; this had been accompanied by 30 per cent increased in overhead expenses. It also accounted for the weak performance compared with 2012 (the decrease between 0.4 per cent to -0.3 per cent).In 2013 for every £1.0 of sales revenue, an average of -0.3p was left to cover operating profit after paying for the cost of the groceries sold. Taxation increased the PostTPM from -3.5 per cent to -1.6 per cent during the 2013 financial period, meaning that the profit after tax on a £100 piece of product was £-1.6.The PreTPM and the PostTPM were very unhealthy providing for a loss over the two years; however, it had made a significant progress of 1.9 per cent during 2013 financial period. Along with the huge decreasing of the ROCE in the figures, it was mainly due to reduced operating profit and descending equity (that was, 1.5 per cent to -1.4 per cent). The ROCE indicated that the performance of Ocado was reduced, as a return on the assets was less than the fund expense rate that the business had to pay. The reduction in the ROCE was 2.9 per cent, which meant an operating profit of -1.4p generated from each £1 of long-term permanent finance in 2013. Thus, the shareholders might see a warning to value
Open Document