Ocado squeezed by service demands

The company said earlier this year that more orders were being delivered late as it struggled to keep up with demand because of capacity constraints.

It added today that work to return customer services to “previous high levels” had paid off with items delivered as ordered currently at 99 per cent and those on time or early at 95.5 per cent. However, it said this work was likely to lead to a slower than expected increase in profit margins.

Sales at the grocer, which sells Waitrose products to much of the UK, rose 16.9% in the 12 weeks to August 7, down from 20.8% in the previous period, after being dogged by capacity issues at its Hatfield centre.

The group floated on the stock market in July 2010 at 180p per share but has seen its price drop as low as 106p amid doubts it can compete with supermarket home delivery services. Shares were down 13 per cent today.