Ocado warehouse closure puts 2,300 jobs at risk

Ocado will stop operations at its Hatfield fulfilment centre later this year, putting 2,300 jobs at risk.

The online grocer, which runs the site in a joint venture with Marks & Spencer, said it hopes to redeploy as many staff as possible to other centres, including its new Luton site.

It comes as retailers increasingly shift to robotic customer fulfilment centres which are more productive.

Ocado said it did not expect the volume of orders it fulfils to be affected.

The firm says the Hatfield site - which was its first fulfilment centre - handles around a fifth of the 400,000 orders it processes per week.

These will now be moved to "high-productivity, next-generation facilities" around the UK, it said, including its Luton site which is scheduled to open later this year.

Ocado said its latest generation of automated fulfilment centres were "consistently achieving well over 200 units picked per labour hour", compared to around 150 for its first-generation site in Hatfield.

The newer sites also use less energy and have better capacity to handle same-day deliveries, it added.

Boss Tim Steiner said that now was the right time to halt operations at Hatfield and consider "future options for the site".

He said a consultation for affected staff had begun but that the business expected to retain "a large proportion of colleagues".

In February, Ocado reported a £500m annual loss, adding that the average number of items bought per visit had fallen from 52 in 2021 to 46 last year, although this was the same amount as before the pandemic.

Online grocery shopping saw a huge rise during the pandemic as people sought to avoid travelling to stores.

Since March, Ocado has been price-matching Tesco on about 10,000 goods as the battle between supermarkets continues.

However, despite the fierce competition, food prices are continuing to soar, rising at the fastest pace for 45 years according to the latest official data.