British online supermarket Ocado Retail has today reported a 3.9% fall in revenue in its latest quarter year-on-year, with its performance held back by labour shortages.

Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, said revenue totaled £547.8m in its fourth quarter to November 28 compared to £570.1m in the same quarter last year.

The joint venture said that early in the quarter, headcount decreased across its delivery and customer fulfilment centre (CFC) roles due to changing conditions in the post-Covid lockdown UK labour market but added that vacancies had since returned to more normal levels.

It said average customer orders per week were up 8.5% to 375,100 from the prior year, driven by a 22% increase in active customers to 832,000.

However, the average basket's value fell 12% to £118 as many consumers returned to the office and spent less time at home.

The venture said that the participation of M&S products in orders continued to be strong, at nearly 30% of the basket.

It also highlighted cost inflation due to nationwide utility price increases and dry ice shortages and is mitigating these through various management measures.

Ocado's revenue had fallen 10.6% in its third quarter, hurt by a July fire at its warehouse in Erith in London, which disrupted operations.

The joint venture said the 2020-21 outturn was expected to be in line with guidance.

It forecast a return to mid-teens revenue growth in 2022, at the top of the historic pre-COVID-19 range of 10-15% and plans investments of around £50m in 2022 across a variety of areas to support growth.

Meanwhile, reports that Marks & Spencer wants to increase its 50% stake in the Ocado Retail online supermarket joint venture with Ocado Group are "pure speculation", Ocado Group's finance chief said today.

"That newsflow is pure speculation," Stephen Daintith told reporters today.

"The partnership is working well. I think all three parties are working well with each other and we're delighted with the progress that we've made and we're excited at the prospect of a strong year of growth ahead of us," he said.

Daintith said the prospect of M&S raising its stake "will always be a live potential transaction."

"But right now there are absolutely no plans in that respect and everything is working well with the group and the joint venture," he added.