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A car gets stuck in snow
A car gets stuck in snow in Hayfield, Derbyshire. Ocado lost £1.5m in profits due to the weather, which delayed drivers, closed roads and distribution centres. Photograph: Danny Lawson/PA
A car gets stuck in snow in Hayfield, Derbyshire. Ocado lost £1.5m in profits due to the weather, which delayed drivers, closed roads and distribution centres. Photograph: Danny Lawson/PA

'Beast from the east' knocks £1.5m off Ocado profits

This article is more than 6 years old

Severe weather and poor driving conditions prompted online supermarket to cancel tens of thousands of orders

Ocado took a £1.5m profit hit from “the Beast from the East” as the online grocer was forced to cancel orders and allow for slower deliveries during the icy and snowy weather earlier this month.

Three small delivery depots, in Bristol, Oxford and Kent, were cut off by snow and the company said it had decided to take fewer orders with vans hampered by the tricky driving conditions.

The online retailer lost tens of thousands of orders, equivalent to 1% of sales, over the quarter, while costs went up and it had to give away undelivered food to foodbanks. Extra vans and drivers were needed to cover orders but the company still had to cancel some deliveries en route.

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Duncan Tatton-Brown, finance director of the online grocer, said: “I’ve never seen weather like this in the time I’ve been at Ocado but despite that we delivered to 296,000 customers in pretty extreme conditions.”

He said the group had managed to meet City expectations for quarterly trading despite the weather problems but would have exceeded that had it not been for the snow.

Sales rose 11.7% to £363.4m in the 13 weeks to 4 March, but slowed in the final week during the bad weather. Shoppers also cut the number of items they bought in response to price inflation.

Ocado said growth had also been held back as it was reaching capacity at its Dordon distribution centre in Staffordshire, while its new robot-driven centre in Andover was slowly expanding its capabilities. The facility can now deliver 25,000 orders a week, up from 5,000 nine months ago, although it is designed ultimately to take 65,000 orders a week. Tatton-Brown suggested it could take up to three years to reach capacity.

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