Ocado share price has been among the worst-performing stocks in the FTSE 100 index and the European stock market at large. The OCDO stock has crashed by 13.81% in the past week and 15.30% in the year to date. The company’s market cap has dropped to 4.489 billion pounds. At the time of writing, the stock was trading 3.74% lower at 530.8p.
Ocado share price has staged a steep decline in the past few weeks, plunging 34% from its highest level this year. The British grocery store recently announced that its venture with Marks & Spencer Group Plc is struggling to make profits this year as customers pull back amid record-high inflation and the cost of living crisis.
The UK-based retail business recently reported an overall pre-tax loss of £501 million in the past financial year, up from £179.9 million in 2021. The readings were higher than the forecasted £399 annual loss by analysts. Ocado’s retail sales fell 3.8% to £2.2 million despite reporting record sales over Christmas.
According to the company, 2022 was a challenging year as customers pulled back and used more discount vouchers. The average basket size fell to 46 items in 2022, down from 52 in 2021, where the company benefited from a spike in demand for grocery deliveries during the pandemic.
Ocado’s Chief Executive Officer Tim Steiner is under pressure to boost results as the company awaits a deferred payment of as much as £191 million from Marks & Spencer. Ocado says it expects almost 40% less than it hoped amid weak performance.
Ocado Share Price Outlook
The daily chart shows that the Ocado share price has been under intense pressure for the past few days. The OCDO stock price has crashed below the 25-day, 50-day, and 100-day moving averages. It is also moving below the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has inched lower and is 2 points above the oversold region.
Therefore, Ocado’s shares are likely to continue falling amid high inflation and the cost of living crisis. If this happens, the bears will be eyeing the next support level at 465p. However, a flip above the important level of 609p will invalidate my bearish thesis.