ocado gas truck

Online grocer Ocado has revealed the cost of the fire in February that destroyed its Andover customer fulfilment centre (CFC) to be £110.3m.

The figure was reported in Ocado’s half-year results for the 26 weeks ending 2 June, which saw the business post a pre-tax loss of £142.8m (2018: loss of £13.6m).

This figure includes a £98.5m exceptional cost from the fire, after £11.8m of insurance claims were taken into account.

The fire, which destroyed the building, machinery and all inventory held on site led to capacity constraints across Ocado’s network.

This saw the business agreeing with supermarket Morrisons to temporarily suspend its access to space in Ocado’s new Erith CFC in exchange for lower store pick fees and no costs recharges from the warehouse.

Although the Andover fire removed 10% of Ocado’s capacity, the grocer said sales had only been impacted by 2% “demonstrating the resilience of the business”.

Turnover grew to £882.3m in the period from £795.3m in 2018.

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Ocado now plans to rebuild Andover into a “state-of-the-art facility” due to go live by the end of 2021/early 2022, with a further CFC to commence building soon in Purfleet.

The group is positive for growth in the UK, particularly following its new 50:50 joint venture with M&S for online food delivery due to start next year, and is also extending its global reach with new CFCs to be built with retail partners in Australia and Canada.

It is also looking to expand its automated and robotic-based technology to other markets.

Tim Steiner, CEO of Ocado, said: "In the last six months the centre of gravity at Ocado Group has shifted. Our exciting new joint venture with M&S creates further growth opportunities for both parties in the UK and allows Ocado Group to increase focus on growing our Ocado Solutions business and innovating for our partners.

“At the same time we are beginning to apply our technology skills and expertise to other related activities which we expect to be of benefit to our Solutions partners as well as to other Ocado Group stakeholders.”