Ocado PLC (LON:OCDO) saw its shares fall today as news of a short-term rise in costs for the online grocer offset strong growth in average orders per week and retail revenue in its third quarter.
In late morning trading, Ocado shares were down 4.3%, or 12.9p at 289.1p.
In a trading update, the FTSE 250-listed firm said its retail revenue rose by 13.1% to £312.7mln in its third quarter to August 27, an improvement on the 12.5% growth seen in its first half.
READ: Ocado's first half profit slides but shares gain as revenue boosted by rising online shopping trend
The firm saw its average orders per week increase by 16.0% to 254,000, up from 219,000 a year earlier, more than offsetting a 1.2% fall in average order size to £106.25, down from £107.56 in 2016.
But Tim Steiner, Ocado's chief executive officer, said: “As channel shift gathers pace we need to take advantage of our industry leadership and so we are scaling up our capacity in our revolutionary new Customer Fulfilment Centre ("CFC") in Andover with the performance of the facility improving week by week. At the same time, we are preparing our fourth, and biggest, CFC to date in Erith, set to open in 2018."
He added: "These investments, while increasing some costs in the short term, will allow us to meet the rapidly growing demand for our services from UK consumers while allowing us to offer the very latest technology to current and future customers of our Ocado Smart Platform."
In June, Ocado clinched a long awaited first overseas licensing deal with an as yet unnamed European retailer, though it was for software only.
The firm has a UK grocery market share of 1.3%. Amazon.com Inc's (NASDAQ:AMZN) recent takeover of Whole Foods has brought renewed focus on online grocery shopping in the UK , where it accounts for about 8% of total grocery sales.
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