REG - Ocado Group PLC - Hatfield CFC - Update to Operations

OcadoAnnouncement

25/04/2023 08:00

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RNS Number : 2935X  Ocado Group PLC  25 April 2023

 

Ocado Group plc

25 April 2023

 

Hatfield CFC - Update to Operations

 

 

Ocado Group plc ("Ocado") announces that Ocado Retail Ltd, the JV with
M&S, has proposed network changes that include ceasing current operations
at its Hatfield Customer Fulfilment Centre ("CFC"), the oldest site in the
Ocado network.

 

Under these proposals, we do not expect any change to the volume of orders
fulfilled. Customer orders which are currently fulfilled in Hatfield, c.20% of
Ocado.com's 400k orders per week, would be moved to the company's
high-productivity, next-generation facilities around the UK. This will include
the nearby Luton CFC which is scheduled to open later this year to take
advantage of the continued channel shift to online.

 

There are currently around 2,300 employees based in Hatfield, and Ocado has
now commenced a consultation process with colleagues on these proposals.
Ocado's priority and focus will be to redeploy as many people as possible to
other sites, primarily to the soon to be opened Luton CFC. The consultation is
expected to close in the summer 2023, with Hatfield operations planned to halt
in line with the start of operations at the Luton site.

 

The Hatfield CFC remains a foundation stone in the Ocado story, as the
company's first fulfilment centre and a core test bed for the Ocado operating
model, now deployed worldwide with Ocado Group's retail partners.

 

However, over the past decade, Ocado has unveiled a raft of new innovations,
enabling huge leaps forward in both CFC productivity and customer experience.
The most recent of these, unveiled at Ocado Re:Imagined in 2022, will deliver
a step-change in the efficiency of Ocado's operations, as well as the quality
of service that UK shoppers can expect online.

 

The latest generation of robotic CFCs are consistently achieving well over 200
units picked per labour hour within the facility ('UPH'), compared to UPH of
around 150 for our first generation CFC in Hatfield. The newest sites also
have much lower energy usage. With the benefit of Ocado Re:Imagined, Ocado
expects further improvements in UPH and customer experience, including
increased capacity for same day deliveries.

 

Ocado Group does not expect a material financial impact from the closure of
Hatfield to its FY23 financial guidance.

 

Tim Steiner, CEO of Ocado Group and Chairman 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 and expect to retain a
large proportion of colleagues impacted by these changes, either in our new
Luton CFC or across our wider UK network. We will be doing everything we can
to support those affected through the consultation."

 

Contacts

 

●    Tim Steiner, Chief Executive Officer, on 01707 228 000

●    Stephen Daintith, Chief Financial Officer, on 01707 228 000

●    David Shriver, Chief Reputation Officer, on 01707 228 000

●    Martin Robinson/Jessica Reid at Teneo, on 020 7353 4200

 

Notes to Editors

About Ocado Group

Ocado Group is a UK based technology company trading on the London Stock
Exchange (Ticker OCDO). It provides end-to-end online grocery fulfilment
solutions to twelve of the world's largest grocery retailers and holds a 50%
share of Ocado Retail Ltd in the UK in a Joint Venture with Marks &
Spencer. Ocado has spent two decades innovating for grocery online, investing
in a wide technology estate that includes robotics, AI & machine learning,
simulation, forecasting, and edge intelligence.

The person responsible for arranging the release of this announcement is:

Neill Abrams

Group General Counsel and Company Secretary

Ocado Group plc

Buildings One & Two Trident Place

Mosquito Way

Hatfield

Hertfordshire

AL10 9UL

Tel: +44 (0)1707 228 000

Email: company.secretary@ocado.com

Ocado Group plc LEI: 213800LO8F61YB8MBC74

 

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