Ocado Group Shares Skyrocket as American Suitors Show Interest: What This Means for the British Online Grocer
Shares of Ocado Soar Amidst Speculation of American Bids
On Thursday, Ocado Group, a British online grocery store, witnessed a remarkable surge in its shares, rising by more than 40%. According to The Times newspaper, there were rumors of several American companies making bids, which contributed to this significant increase.
Potential Interest from Tech Giants
According to a report, Ocado is being considered as a potential investment option by major technology companies, including Amazon. However, when approached for comment, both Ocado and Amazon declined to provide any information to AsumeTech. Following this news, the stock price of Ocado rose by 43%, although it has since slightly reduced its gains. Currently, the London-listed stock price is trading approximately 35% higher than before.
Grocery Delivery Technology and Partnerships
Ocado is a renowned provider of grocery delivery technology, which is extensively used in its retail division to deliver food, beverages, and household essentials to over 800,000 customers in the UK. Interestingly, the company also offers a variety of own-brand items and Marks & Spencer products, as stated on its website. As a result, Marks and Spencer’s shares experienced a 3% surge in the London afternoon trading sessions.
Ocado’s Performance through the Pandemic
During the Covid-19 pandemic, Ocado’s online grocery deliveries experienced a surge in demand as a result of consumers adhering to lockdown measures. However, the company’s shares have since declined, with FTSE Russell, a subsidiary of the London Stock Exchange, suggesting that Ocado may soon be removed from the FTSE 100 index.
In the fiscal year ending November 2022, Ocado reported a pre-tax loss of £501 million ($652 million), exceeding analyst expectations. The company attributed these losses to shifting consumer preferences away from larger basket shopping habits observed during the pandemic, financial pressures resulting from the cost-of-living crisis, inflationary strains, and increased marketing expenses.
Recent reports have indicated that Ocado’s expansion plans are on hold, and in April, the company announced the closure of its oldest automated warehouse located in Hatfield, north of London.
