Summary:
Ocado Retail achieved 15.5% revenue growth (£2.83bn) in FY2025 through a 13% increase in weekly orders and expanded its active customer base to 1.18 million. Strategic price absorption and operational efficiencies drove a 78.3% EBITDA surge despite slight gross margin contraction. The Marks & Spencer joint venture demonstrates progress toward profitability through fulfillment center optimization (94% capacity utilization) and waste reduction.
What This Means for You:
- Consumer-Facing Strategy Alert: Retailers should analyze Ocado’s approach to shielding customers from full food price inflation (33.7% gross margin) while growing market share
- Fulfillment Optimization Blueprint: Study their 19-point CFC capacity increase (75% to 94%) as a model for robotic warehouse efficiency gains
- Regulatory Cost Navigation: Prepare for Extended Producer Responsibility levies like Ocado’s £3.2m packaging compliance cost
- Profitability Watch: Monitor how scaled customer acquisition (14.6% user growth) translates to bottom-line results in evolving markets
Original Post:
Ocado Retail has reported a 15.5% increase in revenue to £2.83bn ($3.8bn) for the financial year 2025 (FY25) propelled by a 13% increase in weekly orders on ocado.com.
Its active customer base saw a 14.6% rise to 1,177,000 by the end of FY25, compared to 1,027,000 at the end of the previous year.
Gross profit followed suit, with a 14.1% increase to £952m, although this was slightly lower than the revenue growth due to a marginal dip in gross margin from 34.1% in FY24 to 33.7% in FY25.
The decrease in gross margin was attributed to strategic price investments and Ocado Retail’s choice not to pass the full impact of food price inflation onto consumers.
The annual report and financial statements for Ocado Retail mark its fifth year as a 50:50 joint venture between Ocado Group and Marks & Spencer Group (M&S).
The company stated: “We are reporting our results for an extended 70-week period as we move to align our financial period with M&S’s moving forward”.
Revenue for the 70 weeks ending 6 April 2025 increased 55.1%, primarily attributed to the expansion of its active customer base.
Ocado Retail also accounted for new extended producer responsibility packaging levies amounting to £3.2m from 1 April 2025.
Despite these factors, the company noted improvements in supplier funding and delivery income, as well as reduced produce waste and losses, which positively impacted gross profit.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 78.3%, reaching £53.5m for FY25, up from £30m in FY24.
This increase was driven by the growth in active customers and orders, optimisation of marketing efforts, more effective supplier negotiations and lower utilities costs across their customer fulfilment centres (CFCs).
The company increased the capacity utilisation of CFCs from 75% at the end of FY23 to up to 94% in February 2025.
Ocado Retail CEO Hannah Gibson stated: “Our topline growth, as well as continued focus on cost and efficiency, has resulted in adjusted EBITDA growth and a reduction to loss before tax. The strong growth we’ve achieved is testament to the hard work that the teams have put into delivering our strategy. We continue to focus on attracting more customers to Ocado to drive our growth and have a clear plan in place to achieve profitability.”
Extra Information:
Ocado Group Investor Relations Report (Detailed CFC efficiency metrics)
M&S Joint Venture Portal (Strategic partnership financial disclosures)
UK Extended Producer Responsibility Guidelines (Regulatory context for £3.2m levy)
People Also Ask About:
- How does Ocado’s EBITDA growth compare to industry benchmarks? Their 78.3% EBITDA jump outpaces most traditional grocers but aligns with top-performing e-commerce specialists.
- What technology drives Ocado’s fulfillment centers? CFCs utilize proprietary grid systems with thousands of robots achieving >200k/week order capacity.
- Why did Ocado extend its reporting period? The 70-week FY aligns accounting with parent company M&S for integrated financial analysis.
- How sustainable is customer growth without profit? Active users grew 14.6% while narrowing losses – a critical path to demonstrate unit economics viability.
Expert Opinion:
“Ocado’s results reveal the tightrope walk of growth-focused e-grocers – absorbing £3.2m regulatory costs while improving EBITDA through robotic efficiency demonstrates operational mastery. However, the critical test remains converting their 1.18 million users into sustainable profitability as marketing costs inevitably scale with customer acquisition.” – Dr. Elena Vardon, Retail Robotics Institute
Key Terms:
- Ocado Retail FY25 revenue growth analysis
- Grocery e-commerce profitability metrics
- Customer Fulfillment Center (CFC) capacity optimization
- Extended Producer Responsibility packaging compliance
- Food retail gross margin compression trends
- M&S joint venture performance indicators
- EBITDA improvement strategies in online grocery
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