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Ocado Shares Plunged 12% on £501M FY2022 Loss. What’s Next?

Simon Mugo trader
Updated 28 Feb 2023

The Ocado Group PLC (LON: OCDO) share price plunged 12% after revealing a loss of £500.8 million before tax as customer spending shrunk despite the retailer attracting more customers. The company’s retail sales fell 3.8% to £2.2 billion, but its global solutions sales more than doubled to £148 million from £67 million in 2021.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Some of the grocery retailer’s achievements during the past year included opening 12 new sites for its customers worldwide, including 9 customer fulfilment centres (CFCs) and 3 Zooms. The firm now has 23 live sites, with 11 located in the UK and 12 in other countries. The company plans to open 6 new sites in 2023, including 5 CFCs.

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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY

In addition, Ocado plans to expand its operations into the Asia Pacific (APAC) region with new sites in Sydney and Melbourne through its partnership with Coles and another site in Japan by partnering with Aeon. The expansion will be possible through Live partnerships as the firm licenses its grocery technology. 

The grocery retailer grew the number of its active customers. Still, the average size of each basket of orders shrunk as customers cut back on their grocery shopping due to the high cost of living in the UK and other developed countries.  

Ocado revealed that it had the right team in place to lead the capital-light expansion of its technologies into the broader automated storage and retrieval solutions (ASTS) industry. Still, the company’s results failed to impress investors frustrated by its loss-making operations. 

The grocery retailer reported a £176.9 million loss in 2021 and is nowhere near turning a profit despite generating revenues worth £2.5 billion. Investors have become impatient with unprofitable companies in the current high-interest rate environment, where they could earn decent returns by holding Treasuries. 

Tim Steiner, Ocado Group’s CEO, said: “Over the last year, every company has had its business model tested by a combination of macro-economic and geopolitical headwinds, and I am pleased that thanks to the creativity and commitment of my colleagues, we have more confidence in our model than ever before.”

The retailer now focuses on its CFCs, Ocado Re:Imagined, and Ocado Retail projects. 

*This is not investment advice. 

The Ocado share price. 

The Ocado share price plunged 12.04% to trade at 554.00p, from Monday’s closing price of 629.80p.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading