says that Ocado Retail has warned that it expects full-year sales to go down because shoppers are spending less on large amounts of groceries because prices are going up.
The company, which is a partnership between online grocery store Ocado (LON:OCDO) and U.K. Marks and Spencer (LON:MKS), a British retailer, said that sales in the fourth quarter will go up by the mid-single digits but won’t be enough to make growth in the year through November.
Even though the number of customers and orders has gone up, the company said, people are keeping their shopping baskets smaller and looking for low-priced items because of recent inflationary pressures.
Related: Stocks in Europe go up, but Ocado falls on a discounted share sale.
Cost headwinds, especially from energy and dry ice, could also add up to £45M to the company’s annual cost base and make the last three months of the year less profitable.
Ocado Retail said, “We now expect to see a small drop in sales in FY22 and EBITDA to be close to break-even.”
On Tuesday, shares of Ocado that were traded in London fell by a lot.
In the third quarter, sales went up to £532 million, which is 2.7% more than the same time last year. This is a turnaround from the previous three months, when sales went down.
At the same time, the number of active customers grew by 23% a year to 946,000, which led to a 10.7% increase in average weekly orders.