Fire at Ocado’s biggest warehouse costs £35m in lost revenues

Ocado Group PLC updates

Sign up to myFT Daily Digest to be the first to know about Ocado Group PLC news.

Ocado’s joint venture with UK retailer Marks and Spencer lost about £35m in sales due to a fire at its largest warehouse over the summer, the online supermarket said on Tuesday.

Quantifying the impact for the first time, the company said it had lost 300,000 orders as a result of the blaze at the site in south-east London. Revenues at Ocado Retail, its partnership with M&S, fell by almost a fifth following the incident.

The fire at the facility in Erith was caused by a robot malfunction and was the second major blaze at one of Ocado’s facilities in the past three years.

Revenues for the joint venture declined 10.6 per cent in its third quarter, mainly as a result of the fire, the group said in a statement on Tuesday.

Before the incident, the company said, the venture had been performing “in line with expectations”. Revenue over the first six weeks of the quarter dipped 1.8 per cent compared with the same period a year earlier, when coronavirus restrictions caused a surge in demand for home deliveries.

In the remaining seven weeks of the quarter, however, revenue dropped 19 per cent. “In addition to the need to cancel orders in the week following the fire, the temporary reduction in capacity reduced our ability to offer slots to new customers,” the company said.

“Despite the challenges we faced in the period, I am delighted to report that Ocado Retail is performing well,” Tim Steiner, chair of Ocado Retail, said.