Ocado boss Tim Steiner has insisted the launch of Amazon Fresh has had “absolutely no impact so far” on the online grocer’s sales.
Of all the grocers, Ocado is expected to suffer the most in the face of Amazon Fresh, analysts have tipped.
Three weeks ago the US etail titan began delivering an assortment of 130,000 fresh, frozen and ambient products to 69 post codes in east and central London, vowing to focus on low prices, quick delivery, vast selection and high levels of customer experience.
But speaking after Ocado unveiled a jump in half-year profits and sales, Steiner bullishly dismissed claims that the emergence of the retailer’s newest rival has hindered its sales line in the capital.
“We’ve seen very strong sales performance from the geography that Amazon Fresh has launched into.”
Tim Steiner, Ocado
“We are monitoring it very carefully and we’ve seen very strong sales performance from the geography that Amazon Fresh has launched into.
“Obviously it’s relatively early days and we will keep a careful eye on it.
“We believe that the online market is still a very small percentage of the overall grocery market and we are hopeful that we will help continue to grow the market and increase the amount of channel shift.”
When pressed by Retail Week on the threat Amazon could pose to Ocado in the longer term, Steiner added: “I don’t know how big they can grow their business, I don’t know how attractive customers are going to find it.
“Amazon is a very clever business with lots of customers and we’ll wait and see how they do.
“But I spent all the early years being told ‘Tesco would crush us’ and we would not exist.
“We just carried on doing what we do best, which is serving our customers, giving them a great proposition, innovating in our sector – and our customers were loyal to us, that’s why we’re still here.
“We’re hopeful that strategy will work against another giant.”
Ocado again reaffirmed plans to sign deals with international retailers in the “medium term” to provide them with its Smart Platform technology and Steiner shrugged off concerns that Brexit would hinder its search for an overseas partner.
He said: “Some people will be deferring investment decisions into the UK…but we are actually exporting technology and infrastructure to enable global retailers to expand their operations in their market.
“If there is a continued weakness in the currency, that will affect the price of imported food fairly quickly.”
Tim Steiner, Ocado
“So I don’t think Brexit should have any negative impact. In fact, it might have a small positive impact as customers we are talking to in the United States, for example, are looking today at our sterling-based pricing and seeing it as being 10% cheaper than it was last week.”
However, Steiner did concede that the shock EU referendum result could result in higher grocery prices for customers.
“As items are being imported in from Europe, I imagine that, if there is a continued weakness in the currency – and obviously the currency is very volatile at the moment – that will affect the price of imported food fairly quickly,” he said.
“A lot of produce comes in from all over the world and I imagine it’s largely priced in dollars, so that definitely will be getting more expensive, and anything that comes from Europe will get slightly more expensive because we’ve fared much worse against the dollar than we have against the euro.
“We are very much a price follower in this market and so it remains to be seen how much of that impact retailers might absorb and how much might get passed on to consumers.”