Business

FTSE 100 edges higher but Ocado shares slide

Ocado van Image copyright Ocado

Shares in Ocado have fallen after the online grocer said investment in a new distribution centre would increase short-term costs.

The news overshadowed a 13.1% increase in the company's retail sales to £312.7m over the 13 weeks to 27 August.

Average orders per week rose 16% to 254,000, although the average order size dipped 1.2% to £106.25.

Shares in the FTSE 250-listed firm fell as much as 6%, but recovered slightly to stand 2% lower at the close.

The benchmark FTSE 100 index struggled for momentum at first before heading higher. By the end of the day, it was up 21.97 points at 7,275.25.

Shares in plumbing and heating supplier Ferguson, which was formerly called Wolseley, rose 2.3% after Citi raised its rating on the company to "buy".

Supermarket shares were in favour after the latest figures from research firm Kantar Worldpanel indicated that sales in the sector rose by 3.6% in the 12 weeks to 10 September. Sales growth has now been above 3% for six months.

Shares in Sainsbury's rose 2.6%, while Morrisons went up by 2% and Tesco by 1%.

On the currency markets, the pound was up 0.11% against the dollar at $1.3512, but it was flat against the euro at 1.1288 euros.