WM Morrison Supermarkets PLC (LON:MRW) has agreed a temporary suspension on using its share of capacity at Ocado PLC’s (LON:OCDO) Erith warehouse, in Kent, after a fire destroyed the online grocer’s Andover facility.
In February, a huge blaze broke out at the Hampshire warehouse after a robot was set alight by a faulty battery charger.
READ: Ocado shares rise as Andover warehouse fire has smaller-than-expected impact on revenue
Ocado said the agreement with Morrisons will give it more room to fulfil other orders.
Morrisons will continue to deliver online orders using goods from its own stores and Ocado’s technology.
READ: Ocado fire probe finds robot set alight by battery fault
Morrisons accounts for more than 10,000 orders per week at Erith and has a deal to use 30% of the warehouse’s future order capacity.
The supermarket group will return to using its share of capacity in Erith in February 2021.
Ocado said Morrisons will not incur any of the costs associated with the use of Erith and will pay lower fees.
The companies have also agreed to relax exclusivity provisions to support Ocado’s deals with international clients.
"Morrisons is a valued partner of Ocado and we are glad that we have been able to come to an equitable and pragmatic agreement that is in the interests of both parties,” said Ocado boss Tim Steiner.