Ocado hunts tech staff as it turns away new customers

ocado1Online grocery giant Ocado is creating hundreds of new tech jobs – including roles covering data science, artificial intelligence and smart optimisation – as the firm struggles to meet increased demand for its services despite claiming it is “working its socks off” to boost capacity.

According to Nielsen figures for a four week period in April and May, a record £1.2bn was spent on buying online groceries, and Ocado believes this demand will continue with rivals accelerating the launch of their own online offerings.

In June, company started a £1bn investment drive, saying it would raise about £657m through an equity placing and retail offer and about £350m through the issue of guaranteed senior unsecured convertible bonds due in 2027.

Now, Ocado Technology has said it is creating 500 new jobs to tackle the capacity issue. The division builds physical and digital technology for online grocery deliveries for itself and Morrisons in the UK, and a number of retailers around Europe, including Groupe Casino in France, ICA in Sweden and Bon Preu in Spain.

The firm also operates in the US, Canada and Australia, with the Ocado Smart Platform launching soon in Japan, in partnership with Aeon.

Ocado saw sales jump by up 91% during lockdown and in June it achieved its highest ever market share of 1.7%. However, the delivery firm has faced criticism from existing customers for its inability to meet demand for its services, triggering a groveling apology.

Chief executive Mel Smith recently said: “No matter how hard we work, we simply do not have the capacity right now to meet all the demand we are seeing from existing customers, let alone new ones.”

The Ocado website is currently not available to customers unless they have “priority access”. It states: “Demand for our service continues to run at many times our current capacity, so slot availability may vary by area.” It asks customers to register for email updates to get delivery slots. The note concludes: “You may only get an email every couple of months, but we are working our socks off to increase capacity, and we will offer more frequent access as soon as we can.”

In September, Ocado will also start delivering online grocery orders for Marks & Spencer, although last week M&S customers were warned to expect limited availability.

Ocado’s tech arm is looking to hire technologists in a variety of roles, and the company confirmed that a “significant” number of these recruits will be based at its recently launched London site.

UPDATE: Ocado has admitted there are 1 million customers waiting to join its online grocery service. Chief executive Steiner said the company, which has about 800,000 customers, could have increased sales more than five times over, given the level of demand but had been held back by the limits of its warehouses and delivery network.

Sales at rose by 40% in May, boosting growth for the first half of the year to 27% compared to the same period last year. However, the firm increased its customer base by just 14% in the six months to May 31, with the rest of its growth coming from existing customers.

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