British online supermarket Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, would stop operations at its Hatfield customer fulfilment centre this summer, Ocado said on Tuesday.
The step comes as retailers increasingly shift to robotic customer fulfilment centres, which are more productive and have lower energy usage.
Ocado said it did not expect any change to the volume of orders fulfilled due to the stoppage of operations at Hatfield, adding that current customer orders fulfilled from the site would be moved to the company's other facilities around the UK.
Tim Steiner, CEO of Ocado Group and chairperson of Ocado Retail said, "As the online grocery channel grows, our new, enhanced fulfilment centres and technologies will drive a step change in customer experience and efficiency.
"With this capacity coming online, now is the right time for us to halt operations at our oldest facility at Hatfield and consider our future options for the site."
Hatfield Fulfilment Centre
Hatfield, the oldest facility in the Ocado network, has around 2,300 employees and the retailer said it has started a consultation process with them to redeploy as many people as possible to other sites, primarily to the soon-to-be-opened Luton site.
Ocado also said it expected further improvement in productivity and increased capacity for same-day deliveries with the help of new technologies.
The company added that it does not expect a material financial impact from the closure of the facility to its FY23 financial guidance.
News by Reuters, additional reporting by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.