to be surprised that Ocado is a loss-making business?

[SloanyPony]

I just thought they would be uber profitable.

Not because I think they are expensive, with Tesco price match on most branded items etc, I just figured that as a company who in my opinion are really "getting it right" from a customer service point of view, they would reap the rewards by being profitable.

I know good customer service doesn't always mean good profits - sadly, its quite the contrary.

I'm just surprised!!!

AIBU?

I am a financial journalist and have been writing about this.

Basically they have borrowed and spent on setting up the state-of-the-art warehouse and packing centre in Hatfield. But they want some of this cash to spend on yachts and horses setting up another centre to grow the business.

Currently the mid-price of the valuation values it at 50 times earnings (basically a share at this level would take 50 years' earnings to pay you back), whereas most retailers, like Tesco trade on 6-8 times.

They obviously predict that earnings will grow faster, that its a secular trend to shop for groceries online, and that their offering (as a customer myself I think it is amazing) will give them a major market share. So thaty 50 multiple looks a little less ridiculous. Particularly when they have grown sales at 20 percent on a compound basis.

But, you do have to ask why they are offering to retail investors and why John Lewis will sell down its stake.

I wish them well -- one of the founders is a uni friend of my husband.

So no, AIBU to be surprised, but this is a nature of an expensive startup

Amazon is only profitable in the last few years

to be successful online you need massive scale = massive investment.

And I'm sure Ocado won't be happy Amazon said today it is launching its own online grocery delivery.

Very interesting! Thank you for your replies. I think I'll carry on being a loyal customer and not buy any shares!

Was going to post on this, 270p per share sounds A LOT to me... initially was tempted when got initial info a few weeks ago, but now kind of scared off a bit....