When Ocado, an online grocery service, started up in January 2002, it wasn’t given much chancre to competing successfully with market leader Tesco, not to mention companies like Sainsbury and Asda,
As it turns out, Ocado is doing well enough to start expanding, even if its revenue figures need some work. Currently available to some 2.1 million households in London and environs, the company plans to more than double that accessibility to five million by the end of the year.
Of course, that’s just a slice of Tesco.com’s market presence; it is available to almost all the 25 million households in Great Britain.
The central difference between Tesco and Ocado is their pick methods. Tesco uses a store pick model, while Ocado gets product from a centralized warehouse.
Ocado needs to generate the equivalent of about $130 million (US) a year to break even; currently, according to reports, it is doing about $25 million in sales annually.
As it turns out, Ocado is doing well enough to start expanding, even if its revenue figures need some work. Currently available to some 2.1 million households in London and environs, the company plans to more than double that accessibility to five million by the end of the year.
Of course, that’s just a slice of Tesco.com’s market presence; it is available to almost all the 25 million households in Great Britain.
The central difference between Tesco and Ocado is their pick methods. Tesco uses a store pick model, while Ocado gets product from a centralized warehouse.
Ocado needs to generate the equivalent of about $130 million (US) a year to break even; currently, according to reports, it is doing about $25 million in sales annually.
- KC's View:
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So all it needs to break even is another $105 million in sales…? Sounds easy enough, especially since all Ocado has to compete with is Tesco, Sainsbury and Wal-Mart’s Asda Group.
Actually, we’re rooting for them to succeed. The more successes there are in the dot-com space, the greater the momentum to keep the business viable.
