Supermarket chain Morrisons has said it will “gradually cease” deliveries from Ocado’s automated warehouse in Erith, southeast England, but will still utilise Ocado’s central England warehouse.
Ocado Group said Morrisons will look to increasingly use its site in Dordon, near Birmingham, as well as fulfilling more online orders from the grocer’s store network through Ocado technology.
The change means Ocado Retail, a joint venture between Ocado Group and Marks & Spencer, has the opportunity to access additional capacity at the near-full Erith warehouse.
The decision to deliver from just one Ocado warehouse and Morrisons store network was driven by an increase in customer demand for its online offering, according to Morrisons chief executive Rami Baitiéh.
“We have a successful partnership with Ocado and we value their expertise and their technology highly,” he said.
“As our online business continues to grow we have decided to process a greater share of our online volume through the Dordon CFC and with in-store fulfilment – which gives our customers full access to our unique Market Street offer.”
Ocado Group chief executive Tim Steiner said that the business is working with Morrisons to “ensure seamless continuity of service to their customers and to continue strong market share growth across the UK market with the Ocado Smart Platform”.
He added: “As Ocado Retail moves towards full utilisation of existing capacity, this decision enables a helpful option to provide it with further short-term growth, without an expectation for additional capex.”
Ocado said the cash impact of these changes is expected to be broadly neutral across 2025 and 2026.
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