Online supermarket Ocado set to crash out of Footsie as shares slump

Ocado is on the verge of being demoted from the FTSE 100 in another blow to the embattled online supermarket.

According to an advisory note from the London Stock Exchange Group, the London-listed company faces a relegation from the top list of listed companies next month.

The realignment – ​​which takes place in June based on the value of exchange companies on Tuesday next week – is expected to crash Ocado in the FTSE 250.

While a huge disappointment for the tech business, the downgrade will come as a minor surprise after Ocado’s annual losses soared to half a billion pounds last year, while shares are down more than 35 per cent year-to-date.

The company’s stock is more than 85 percent below its high during the pandemic.

Shares fell 0.2 percent, or 0.8 pence, to 402.6 pence yesterday.

Ocado – founded 23 years ago by Jonathan Faiman, Jason Gissing and Tim Steiner – has struggled since shoppers returned to brick-and-mortar stores, restaurants and pubs after restrictions imposed during Covid ended.

And customers facing rising living costs are adding fewer items to their online shopping baskets.

Last year’s loss of £500.8 million came on top of a loss of £177 million a year earlier.

Danni Hewson, head of financial analysis at investment platform AJ Bell, said: ‘Ocado’s fortunes looked pretty good during Covid times, as supermarkets scrambled to increase their online capacity while concerned shoppers rejected the long lines that snaked around parking garages at the height of the pandemic.

“But it grew too far, too fast, and with inflation hot on the heels of a return to ‘normality’, it was forced to halt expansion plans and cut costs by closing the oldest warehouse.”