(Bloomberg) —
Ocado Group Plc’s online grocery joint venture with Marks & Spencer Group Plc warned that its revenue growth this year might be lower than previously expected and said rising energy costs could impact earnings.
Ocado Retail, as the joint venture is called, is also initiating cost cutting measures across the business and reported a 5.7% fall in retail revenue in the first quarter as customer shopping habits return to pre-pandemic levels, according to a statement Thursday.
Revenue growth previously expected to be in the “mid-teens” may be closer to 10% for the full year, the company said, citing inflation, the war in Ukraine and a return to more normal shopping patterns. Ocado Retail added its earnings margin is likely to be impacted by significant increases in energy costs.
The joint venture has struggled with capacity during the pandemic when demand for online grocery shopping was at record highs. A fire in a warehouse in July slowed sales growth and the company has also been battling labor shortages and rising competition.
The wider supermarket industry has been hampered by higher raw material and product prices as well as higher prices on energy, utilities and dry ice in the first quarter, according to the statement.
Ocado Group’s main focus is selling its robotic warehouse technology to other retailers worldwide to boost their online operations with 10 partnerships ranging from Kroger Co. in the U.S. to Coles Group Ltd. in Australia.
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