Ocado's doing the business, but it needs to land its whale

It’s become Ocado’s white whale.

Fixing up an overseas buyer for its technology is proving just as hard for the online grocer’s bosses as it was for Captain Ahab to down Moby Dick.

The company has been helping a still unnamed regional retailer with its move online, supplying software and the like. But a sprat isn’t going to convince the City’s sea dogs.

So the hunt goes on. We seem to have been talking about this forever.

In the meantime Ocado has been doing rather well. The future might be clouded by Amazon’s intentions and any number of other uncertainties (hello Brexit) but in Ocado’s present it is enjoying an Indian summer even as the British economy turns as autumnal as its weather.

More and more shoppers are choosing to buy their groceries online, helping Ocado to post some impressive numbers.

Sales grew 13 per cent, average orders per week by 16 per cent, and though the average order size fell a little, that’s not anything to worry about just yet. Life on its deck is good.

In a grocery market that is moving in a positive direction, evidenced by the latest data supplied by Kantar Worldpanel that put supermarket sales growth for the 12 weeks ending August 13 at a healthy 4 per cent year on year, Ocado is outpacing the competition. That includes even Aldi and Lidl.

Of course, Ocado’s market share is still very small by comparison, but it’s in the right niche.

Boosting its capacity with another of what the top brass likes to describe as “our revolutionary new customer fulfilment centres”, or CFCs, in Andover would appear to be an eminently sensible investment to make.

I’m just thinking Ocado might not want to be using the “CFC” abbreviation in future. Those of a certain age may remember that those three letters used to denote ozone layer destroying gases found in aerosols. Just a thought.

Yet despite all this, despite the company’s continuing to prove its many doubters wrong, it still can’t catch a break in the City, whose investors marked the shares down by 5 per cent.

Tells us! What more can we do?

Catch the whale, that’s what you can do. Ocado’s cardinal sin was to promise the earth, only to deliver a chintzy little software deal.

It has some smart managers, who are delivering when it comes to sales. But its bosses over promised on deals, and they’ve badly under delivered. They’ve failed to manage expectations.

Sales growing like Japanese knotweed? Doesn’t matter. We want the pot of gold you said you’d go out and get.

Ocado’s exec won’t get any credit until they trot out to talk to the City about a the big one. The whale. They’ll just face a battery of tough questions they’d rather not answer. They need to find a working harpoon.