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| Ocado warns profits to be lower due to extra staffing | Ocado warns profits to be lower due to extra staffing |
| (40 minutes later) | |
| Shares in online grocer Ocado have fallen more than 11% after it said profits would be lower than expected. | Shares in online grocer Ocado have fallen more than 11% after it said profits would be lower than expected. |
| The firm, which mostly sells Waitrose goods, said it had been working to increase capacity at its main Hatfield depot. | The firm, which mostly sells Waitrose goods, said it had been working to increase capacity at its main Hatfield depot. |
| However, the online retailer said its profit margins were hit by production issues and the need to bring on extra staff while this work took place. | However, the online retailer said its profit margins were hit by production issues and the need to bring on extra staff while this work took place. |
| The group said it expected gross sales of £643m for the year to 27 November. | The group said it expected gross sales of £643m for the year to 27 November. |
| "We are encouraged by the operational capacity improvements that we have made," said chief executive Tim Steiner. | "We are encouraged by the operational capacity improvements that we have made," said chief executive Tim Steiner. |
| "But [we] are disappointed that we did not achieve as large or as early an increase as we had originally planned." | "But [we] are disappointed that we did not achieve as large or as early an increase as we had originally planned." |
| The company said it had reached a peak of 131,881 deliveries a week during the last week of the financial year | The company said it had reached a peak of 131,881 deliveries a week during the last week of the financial year |
| However the firm had said it wanted to reach a target of 140,000. | However the firm had said it wanted to reach a target of 140,000. |
| Customer service | Customer service |
| Shares in Ocado fell sharply as investors feared profits would be lower than expected and problems at the firm may not be resolved. | Shares in Ocado fell sharply as investors feared profits would be lower than expected and problems at the firm may not be resolved. |
| It is not the first time the company has had to bring on extra staff to maintain customer service. | It is not the first time the company has had to bring on extra staff to maintain customer service. |
| "The previous trading update on September 19 also noted further investment in customer service... so investors are likely to question whether this is really just a short-term issue," said analysts at Espirito Santo in a note to investors. | "The previous trading update on September 19 also noted further investment in customer service... so investors are likely to question whether this is really just a short-term issue," said analysts at Espirito Santo in a note to investors. |
| Ocado said work on its new distribution centre in Dordon, Warwickshire, remained on track. It is expected to open next year. | Ocado said work on its new distribution centre in Dordon, Warwickshire, remained on track. It is expected to open next year. |
| Earlier this year, Waitrose announced it would be expanding its online presence to within the M25 area, potentially threatening Ocado's own business. | Earlier this year, Waitrose announced it would be expanding its online presence to within the M25 area, potentially threatening Ocado's own business. |
| Ocado was founded in 2001 by three former Goldman Sachs bankers. | Ocado was founded in 2001 by three former Goldman Sachs bankers. |
| Its shares floated at 180 pence in July 2010, but have since fallen by 65%. | Its shares floated at 180 pence in July 2010, but have since fallen by 65%. |