Ocado is wading into the grocery promotions war with the launch of a ‘Saving Pass’, which it claims could save customers over £100 a year.
The Saving Pass discount gives customers at least 10% off on more than 500 branded products including Pepsi, Ariel and Kellogg’s for an annual fee. The price for customers signing up for the launch is £8.99.
For products already under its Tesco Price Match guarantee the saving will be greater. The move comes as Ocado reported gross sales up 19.5% to £444.6m in the 36 weeks to August 7, but warned investment in customer service meant full-year margins were likely to be slightly lower than expected. Gross sales were up 16.9% to £147.9m for the 12 weeks to August 7.
Ocado, which mainly delivers Waitrose products, said capacity was still limited at its Hatfield customer fulfilment centre, but it was working to improve peak capacity in the fourth quarter with a target of 140,000 orders per week. It said work on a second customer fulfilment centre was progressing well.
Ocado chief executive Tim Steiner said the drive to improve customer service might hit margins but it was essential to the business model.
He added that while some brokers had criticised the plan for a second distribution centre before the first was at full capacity, “it is the only way to ensure long-term growth”.