Ocado (LON:OCDO), the online grocer, has blamed the Olympics and Jubilee celebrations for its slowing sales growth over the summer.
In the three months to 5 August 2012, Ocado’s gross sales rose by 9.9 per cent to £162.6 million. But over the first half of the year, sales had increased at a pace of 12 per cent.
Tim Steiner, chief executive of Ocado, warned that the retail environment would continue to pose challenges. ‘The grocery market and the general economic picture remain challenging, with consumer confidence subdued and significant competitive couponing activity.’
However, he added his confidence about achieving ‘an increase in sales growth through the remainder of the period’.
Although other grocers would look enviously at the rapid expansion of Ocado’s sales, which have soared 11.3 per cent in the year to date, investors are more concerned about the equally precipitous growth of the group’s debt.
The company’s net debt stands at £83.1 million, up 17 per cent from its level of £71.3 million in May and more than quadruple the amount of £19.2 million in November 2011.
At the same time, the firm has never turned a profit from its sales since it listed in 2009. It lost £500,000 in 2011, and researcher Digital Look forecasts losses of £120,000 and £1.26 million this year and next.
Following its management statement today, shares in Ocado fell by 1.6 per cent to 66.1p. This is nearly half their valuation of 128p six months ago.