Ocado and Marks & Spencer’s online retail joint-venture is to close its oldest warehouse, in Hatfield, putting up to 2,300 jobs at risk.
Ocado said the orders handled at the warehouse in the Hertfordshire town would be switched to the group’s other automated warehouses, including a new site scheduled to open in Luton later this year. The Hatfield site processes about a fifth of Ocado.com’s 400,000 weekly orders.
The site in Hatfield will close as the facility in Luton, which has newer technology, opens.
Ocado said consultation with staff about potential job losses at the site, which has been in operation for 20 years, had begun but added: “Ocado’s priority and focus will be to redeploy as many people as possible to other sites.”
The closure comes as Ocado’s sales have fallen back after a rise in orders during the pandemic lockdowns when households switched to online grocery shopping and avoided supermarkets.
In February, Ocado said it was pausing the rollout of new distribution centres in the UK after making a record annual loss of more than £500m last year. Revenues at Ocado Retail, the M&S joint venture with M&S, fell by 3.8% in 2022.
Hatfield was Ocado’s first automated warehouse, opened in 2002. The group has since switched to robot-led picking and packing operations that require fewer staff to operate and are more efficient.
Ocado said: “The latest generation of robotic customer fulfilment centres (CFCs) are consistently achieving well over 200 units picked per labour hour … compared with about 150 for our first generation CFC in Hatfield.”
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Tim Steiner, the chief executive of Ocado Group and chair 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.
“Ocado.com customers will continue to enjoy the same outstanding standard of service throughout the region, which will further improve as the benefits of our new technologies are deployed across the network. We have many brilliant Hatfield-based colleagues who have been with us for a long time and are a big part of our journey. We want to keep as much of this talent and experience within the business as possible.”
