Ocado shares in UK drop after largest automated warehouse fire

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LONDON, July 19 (Reuters) – Shares of Ocado (OCDO.L) fell 3% on Monday after the online supermarket and UK technology group’s largest automated warehouse burned down, halting order fulfillment of customers on the site.

The blaze at its center in Erith, south-east London, on Friday was the group’s second major blaze in the past three years.

Ocado said on Saturday that the fire appeared to have been caused by the collision of three robots on the warehouse grid system.

He said the damage was limited to a small section of less than 1% of the grid.

Ocado warned of “some disruption to operations,” but said it expected the facility to resume operations this week.

An Ocado delivery van is seen driving in Hatfield, Britain February 26, 2021. REUTERS / Matthew Childs / File Photo

A massive fire destroyed the Ocado distribution center in Andover, southern England, in 2019, requiring total reconstruction. This incident was caused by an electrical fault in a battery which caused a robot to fire.

Ocado said the Andover fire did not affect the viability of the group’s model. It has since signed several other technology partnership agreements with foreign supermarket groups.

But a second robot fire could affect existing and potential customers of Ocado’s technology.

Erith’s factory serves Ocado Retail – a joint venture between Ocado Group and Marks & Spencer (MKS.L).

Ocado shares fell 3% to 1,749 pence at 0704 GMT, taking losses from 2021 to 23%.

Reporting by James Davey; Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.

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