For a long time, Ocado’s share price was fairly stagnant. Those looking to invest in the company might have been disappointed that they didn’t get the return they were expecting. From its high of just over 606 in February 2014, it had slumped to just 243 in November of last year.
Thankfully for the company, things have been looking up ever since and their share price has risen steadily since to a point in March where it was nearly back to that 600 mark. In an ever-competitive grocery market, Ocado made the move to be more technology dependent in 2015, but it didn’t immediately pay off.
Investment In Technology
Their use of technology centres has been gaining traction and their Customer Fulfilment Centres (CFCs) have enabled them to sign a series of recent deals to increase the strength of their service.
None of those deals have been anywhere near as big, however, as the one that has just been signed with US retailer Kroger. It has enabled them to have a strong foothold in both the UK and North America.
That deal has taken Ocado to new heights, their share price is continually increasing and is now nearing the 900 mark. It has burnt many people who lost faith in the company and rewarded many who stuck through with it and trusted their new direction. The future looks bright for Ocado – they hoped to prove that their technology could attract companies and they have done exactly that.
The downside to this, however, is that each deal Ocado signs requires a large amount of investment in its business, and therefore the large profits that it hopes to earn will take time to come to fruition. Ocado believed in their technology and they believed that their business model could turn a huge profit.
They have been proved right with the first part of that plan, but the second part remains to be seen. If they can achieve that, then surely their share price will only continue to rise in the way it has done for the last few months.