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Ocado to roll out new Zoom fulfilment service

Ocado to roll out new Zoom fulfilment service

Online supermarket giant Ocado is trialling a new delivery service, Ocado Zoom, designed to deliver groceries to customers within a one-hour window, pitting the service in competition with Amazon’s Prime Now.

The service, to launch next month in West London, will be propped up by Ocado’s unique, proprietary warehouse technology and operations, featuring automated, centralised fulfilment and wide reaching distribution network. Supply chain features including small batch delivery, daily replenishment and a broad range offer will seek to make service more enticing. Ocado Zoom will have more than 10,000 different items on offer at a competitive price, said the company.

Ocado has released its 2018 full-year prelim results to 2 December 2018. The online food retailer recorded a pre-tax loss of £44.4m, compared with £9.8m in the previous 12 months. However, its sales rose by 12.3% to £1.59bn. Retail distribution costs increased from £401.8m from £356.1m in the 52 weeks to 3 December 2017. Solutions distribution costs including admin increased to £140.9m from £115.1 the year before, emphasising on its growing investment in this area of the business. Reported distribution costs was £485.4m from £434.2m the year before.

Depreciation, amortisation and impairment increased by 28.6% to £91.3m, reflecting the increased charge arising from the opening of the Erith CFC in Summer 2018, the full-year impact of Andover, the second General Merchandise Distribution Centre and the associated software for these projects.

The company is in rumoured talks with M&S to deliver its food and drink on the behalf of the beleaguered retailer, which has forced the company to close a number of stores and focus more on its online proposition, including in food.

Tim Steiner, Chief Executive Officer of Ocado, said: “Our performance last year was the result of many years of focus, dedication and perseverance: what we have called our “18-year overnight success”. Our growth story, however, is only just beginning. We now have in place a platform for significant and sustainable long-term value creation as the leading pure-play digital grocer in the UK, a world-leading provider of end-to-end ecommerce grocery solutions, and as an innovative and creative technology company applying our proprietary knowledge to a range of challenges.

“Our transformation journey is well under way with increased cash fees earned and greater investment as we execute on behalf of our partners. Creating future value now will involve us continuing to scale the business, enhancing our platform, enabling our UK retail business to take advantage of all its opportunities for growth, and innovating for the future. We look forward to fulfilling these opportunities with excitement and determination”.

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