Ocado Retail plans to close its oldest robot-run warehouse, which currently carries out around 20% of weekly orders from its website.
Talks have begun with the 2,300 staff employed at the Hatfield Customer Fulfilment Centre, whose jobs are at risk from the closure, though the company said its “priority and focus” will be to move as many as possible to other sites.
The company, which is a joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), said it is considering future options for the site.
Ocado Group said it does not expect the financial impact from the closure to have a material affect on its financial guidance for the current year.
Customer orders currently fulfilled at Hatfield are planned to be moved to newer facilities around the UK, including Luton, which is scheduled to open later this year.
Hatfield’s efficiency levels have been superseded by other newer sites, the company said, with newer robots at other depots able to pick more than 200 grocery items per hour, compared to 150 at the Hertfordshire depot.
Ocado Group chief executive Tim Steiner said the company’s new centres and technologies will “drive a step change in customer experience and efficiency” and so “now is the right time for us to halt operations at our oldest facility at Hatfield and consider our future options for the site”.
OCDO shares were down almost 1% to 501.2p in early trade on Tuesday.