Ocado plan to raise £1.1 billion as grocery market accelerates
Ocado have announced that they are hoping to raise over 1 billion pounds to expand their online grocery business thanks to the substantial acceleration in the market after COVID-19 had created a rise in sales. The company plan to further expand its online grocery delivery.
“Online grocery is experiencing an inflection point. The current crisis is proving a catalyst for permanent and significant acceleration in channel shift globally which we believe will redraw the landscape for the grocery industry worldwide.”
– Tim Steiner, Ocado’s founder and chief executive.
Ocado is planning to raise £657m in an equity share from various investors, and £350m in convertible bonds which will help Ocado capitalize on opportunities to further their growth as an online grocery supermarket.
The UK and US have seen a huge increase in online grocery shopping since lockdown. In May Intelligence agency Mintel stated that online grocery market will grow by 33% in 2020 and this number includes a rise in the number of elderly people transitioning onto shopping online, this is likely due to Consumers appreciating the convenience of doing so. Before social distancing began 7% of Brits increased their total amount of grocery and non-grocery online shopping. In less than 2 months that number increased to 36%. 50% of British consumers are limiting the time they spend in-store with 9% opting for click and collect.
Ocado are focusing on adapting to our new future and are prepared to harness the benefits of it. Ocado prioritizing funding that will grow their online grocery store could create an opening of more opportunities for brands who offer perishables.