SHARE OF THE WEEK: Ocado set to reveal festive trade figures

Ocado will shine a light on changing shopping habits when it announces its trading update for the all-important festive period on Tuesday. 

Investors will be hoping for more Christmas cheer after stellar figures from the likes of Tesco and M&S in recent days. 

But their hopes could be dashed after a challenging year for the online grocer, which has struggled to maintain growth rates as pandemic-fuelled enthusiasm for online shopping wanes and cost-conscious shoppers hunt for bargains. 

Hailed as the ultimate pandemic-winner, Ocado Retail – a joint venture between Ocado and M&S – saw sales boom as bricks-and-mortar retailers shut their doors. 

But the tide quickly turned. Ocado’s shares have slumped 55 per cent over the past year. 

On Tuesday, analysts will be looking at whether customers at Ocado Retail – which sells Ocado and M&S products – are shunning its pricier range in favour of cheaper goods. 

Updates on the retailer’s tech arm will also be front of mind, including the rollout of microsites to support Ocado Zoom, its planned one-hour delivery service in the UK. 

Sophie Lund-Yates, analyst at Hargreaves Lansdown, said average basket value at Ocado was expected to be down 6 per cent. She added: ‘The difficult conditions mean Ocado expects to see a small sales decline for the full year, and close to break-even cash profits.’ 

Investors will approach the update with trepidation after fellow online retailer Asos saw sales slip 8 per cent over Christmas.