Ocado shares were rocked after it warned grocery sales this year would fall well short of expectations.
The online supermarket saw £740million wiped off its value as shares crashed 8.2 per cent, or 98.5p, to 1105p.
Marks & Spencer shares were also down 2.6 per cent, or 4.25p, to 162.7p because it owns half of Ocado’s grocery business, Ocado Retail.
Online supermarket Ocado saw £740m wiped off its value as shares crashed 8.2% after it warned that sales would fall well short of expectations
Ocado slashed its growth forecast for 2022 from ‘the high-teens’ to ‘around 10 per cent’ because of rising prices and the war in Ukraine.
It also warned its profit margins would be squeezed by rising energy costs.
The retailer said the full scale of food price inflation is ‘difficult to predict’ and uncertainty has increased ‘significantly’ since Russia invaded its neighbour.
It warned demand would be hit as shoppers face a cost-of-living crisis caused by rising taxes and energy bills.
The online grocer also said shopping patterns are returning to pre-Covid levels, with basket sizes 15 per cent smaller in the three months to February 27 than the same time a year earlier.
Ocado’s customer base grew, but the return to working in offices and eating at restaurants caused sales to slump 5.7 per cent in the same period from a year ago, to £599million.
It is the first sign of sales stalling at the retailer since the outbreak of Covid, which saw it benefit from locked down customers shopping online.
Its shares hit a high of 2819p in September 2020 but have since lost more than 60 per cent of their value.
AJ Bell investment director Russ Mould said: ‘For the most part it’s been pretty tough going for Ocado since the heady days in September 2020 when it reached all-time highs of close to £30 per share.
‘Back then it had been a beneficiary of lockdown and the enforced need to do grocery shopping online.’
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