SHARE OF THE WEEK: Will Ocado deliver a salve to shareholders?

Will Ocado deliver a salve to its concerned shareholders next week?

Investors will be nervous to hear how the British supermarket and technology company performed during the first half amid ongoing woes.

Tuesday’s announcement of results could be a tale of two halves as Ocado opens high-tech warehouses around the world as its UK grocery arm swings.

The London-listed company is reeling from a £500m loss in 2022 and a share price drop of almost 80 per cent since the peak of the pandemic in 2020. Its supermarket division – Ocado Retail – has been hit by customers buying fewer items to online shopping baskets because the cost of living has risen.

Analysts called the latest annual figures ‘really gloomy’.

The chairman of Marks & Spencer, which owns 50 percent of Ocado’s supermarket business, said there was “work to be done”.

Archie Norman said he was ‘not happy with where it is’, but added: ‘We strongly believe in the future of Ocado – we think it’s the right model for M&S online.’

“Lockdowns had convinced markets that online delivery was the only game in town,” said Danni Hewson, analyst at AJ Bell.

“Growth rates generated then are hard to sustain and rising interest rates have taken their toll on perceived growth stocks, especially those that jam tomorrow but lose today.”

Discount stores Aldi and Lidl have gained market share, which means that the more expensive supermarkets are struggling to keep their customer base.