Publish date:

Ocado Falls as Warehouse Fire Disrupts Online Shopping Orders

Ocado investors brace for potential fallout from a 'three-bot' collision that caused a fire in one of the online grocery giant’s U.K. fulfillment centers.

Ocado Group (OCDDY) was on investors’ radars Monday after a "three-bot" collision caused a fire in one of the online grocery giant’s U.K. fulfillment centers, resulting in potential grocery delivery delays of up to a week.

The blaze broke out late on Friday after three robots used to handle orders collided at the Erith facility in southeast London, the company said. The warehouse can handle about 150,000 orders a week under Ocado’s joint venture with Marks & Spencer.

The “collision of three bots” used to fill orders triggered the fire, the company said. The company expects the facility to begin operating again “within the coming week” as the damage is limited to a small section of “less than 1%” of the grid.

The incident, which required about 100 firefighters and 15 fire engines to tamp down, is the second major fire to hit an Ocado warehouse in the past three years following a blaze at its facility in Andover, Hampshire, in February 2019.

TheStreet Recommends

Ocado last year officially opened the doors on two robotically operated warehouses - for Groupe Casino in France and Sobey’s in Canada. In 2021, the company plans to expand that to 10 warehouses worldwide using its boxy robots.

U.S. grocery-store giant Kroger  (KR) - Get Kroger Co. (KR) Report has announced plans for 10 Ocado robotic warehouses in the U.S., with the option to build 10 more. 

Kroger last month posted better-than-expected results for its fiscal first quarter and increased its guidance for 2021 to between $2.95 and $3.10 a share, versus a prior range of $2.75 to $2.95.

At last check, Ocado's American depositary receipts were down 4.14% at $48.60.