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Ocado warehouse fire impacts Q1 sales

Ocado warehouse fire impacts Q1 sales

Online supermarket retailer Ocado has emphasised that the fire at its next generation warehouse in Andover has caused a drop in revenue growth during the first quarter of the year.

Sales dropped 1.2% over the period, exacerbated by a lower average order size.

More than 30,000 orders - 10% of Ocado's capacity - were processed at the Andover warehouse, which was on fire for four days, according to reports from the BBC. Its initial investigations suggested no major concerns of its business model, which features robotics and its proprietary warehouse technology at its core.

Ocado is selling the operating system to other retailers and there was concern it could affect the other parts of its business.

A temporary delivery outpost has been set up in Andover and an increase in capacity at its other next-generation warehouse in Erith has been prepared to best mitigate against the fire.

Tim Steiner, Ocado's Chief Executive Officer, said: "Our first quarter was characterised by continued strong underlying growth in Ocado but also the initial impact of the fire at our CFC in Andover on our headline numbers.

“The fire has been a setback, but it will be only a temporary one. Over the last few weeks, our teams have been working hard to minimise any disruption to our customers and we will build a state-of-the-art replacement facility that reflects all the innovations and improvements we have made since Andover opened in November 2016.

“At the same time we all remain focused on delivering customers the very best service, quality, choice and value. Our commitment to these objectives underpinned the underlying progress we made in the quarter.

“With the Joint Venture signed with M&S at the end of February, Ocado Retail has never been in a stronger position to lead channel shift while constantly setting the bar for excellence in online grocery in the UK. We are looking forward to the future with excitement and determination."

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