UPDATE 1-Ocado's sales rise 21 percent in Christmas period

Thu Jan 16, 2014 3:08am EST

LONDON Jan 16 (Reuters) - British online grocer Ocado posted gross sales growth of 21.3 percent in the six weeks to Jan. 5, reflecting strong trading in the seven days up to Christmas.

The firm, whose range includes products supplied by upmarket grocer Waitrose, said on Thursday it made gross sales of 111.1 million pounds ($181.7 million) in the six weeks to Jan. 5, up from 91.6 million pounds in the same period last year.

Gross sales for the 16 weeks to 1 December 2013, the fiscal fourth quarter of its 2012-13 financial year, were up 20.1 percent to 271.0 million pounds, the company said, and average orders per week rose 19.1 percent to 151,743, while average order size nudged up 0.8 percent to 111.6 pounds.

"While we are encouraged by this current trading, the retail environment remains both challenging and competitive, with consumer sentiment subdued, and we expect to continue growing broadly in line with, or slightly ahead of, the market," said Chief Executive Tim Steiner.

Britain's traditional supermarkets are seeing little, if any, growth in sales at their big stores, but the online grocery market is growing strongly.

Internet grocery sales in Britain over the Christmas/New Year period grew 22 percent year-on-year with 15 percent of British households placing orders, market researcher Kantar Worldpanel said on Tuesday.

Shares in Ocado have risen over five-fold in the last year on the back of the firm's 200 million pounds-plus, 25-year deal with Morrisons, Britain's No. 4 grocer, to provide its online grocery operation, and on hopes it could do more deals overseas.

The firm has not made an annual pretax profit since it was founded in 2000 by three former Goldman Sachs bankers but the Morrisons deal has transformed its prospects.

Morrisons.com made its first deliveries on schedule on Jan. 10.

Shares in Ocado were trading down 2 percent at 512 pence at 0806 GMT on Thursday, valuing the business at about 3 billion pounds.