Ocado Group PLC (LSE:OCDO) shares plunged 15% after the online grocery technology group revealed some fresh challenges in Canada, where the planned opening of a new robotic warehouse was paused.
Canadian supermarket chain Sobeys has decided to hold fire on the opening of what would have been its fourth Ocado-powered warehouse and also to make the partnership no longer exclusive.
It follows the decision of US partner Kroger to close three sites powered by Ocado technology in March.
The fourth Sobeys robotic warehouse had been planned for 2025 and the "go-live timeline" for the Vancouver suite will be under review, Ocado said.
Ocado and Sobeys have decided to focus on driving order and sales volumes across the current three warehouses, in Toronto, Montreal and Calgary, plus hand-picking in almost 100 stores.
Ocado said its financial guidance for the year remains unchanged, as is its target to be cash flow positive in the mid-term.
The news comes ahead of Ocado's demotion from the FTSE 100 index, which will be effected after the close this Friday.