Ocado is rolling out free deliveries on Wednesday as it fights back against Tesco’s fulfillment charge cuts.
The etailer has trialled the offer in certain postcodes but has widened it to most of the country, according to chief financial officer Duncan Tatton-Brown.
He said: “It works for us and it works for the customer. Customers who are happy to pay £1 or £2 for delivery can receive it on a Friday night, while customers who are happy to receive it on Wednesday can do so for free can.”
Tesco group multichannel director Robin Terrell said last week that delivery charges were the “number one barrier to shopping online” when he unveiled a suite of price cuts for customer fulfillment.
However, Tatton-Brown said Ocado had yet to see any impact from Tesco’s delivery changes.
He said: “We have been becoming increasingly competitive on price on delivery. Tesco is more likely catching up with that.”
Tatton-Brown said he was pleased with the “operational progress” of Morrisons.com, which Ocado is operating in partnership with the Bradford-based grocer. The tie-up added £8.7m to Ocado sales in its first quarter.
Tatton-Brown said Ocado’s next IP tie-up will most likely be made with an overseas retailer but warned it would not be in the short term.
He said that it was “working furiously” to make sure that its software worked in different languages and currencies.
Tatton-Brown admitted that Ocado had taken its foot of the gas in terms of expanding its range as it concentrated on its Morrisons partnership. Tatton-Brown said that phase two of its Dordon distribution centre would open up capacity to enable it to extend its range.
Ocado also plans to roll-out stand-alone pet store Fetch.co.uk across the UK in its first half. It launched the site last year in selected areas.
Tatton-Brown said Fetch.co.uk was “doing well” and it is planning to launch another stand-alone site later this year but he would not reveal which category it would focus on.
Ocado reported a first quarter sales rise this morning, with gross sales surging 22.6% to £227.5m in the 12 weeks to February 23.