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(Alliance News) - Ocado Group PLC on Tuesday said Ocado Retail Ltd plans to close its Hatfield customer fulfilment centre, north of London.
Ocado Retail is a joint venture between online grocer and warehouse technology firm Ocado Group PLC and food, clothing and homewares retailer Marks & Spencer Group PLC. Both companies hold a 50% interest.
Ocado said its priority is to redeploy the 2,300 employees based in Hatfield, in Hertfordshire, to other sites, adding that it has begun a consultation process with staff.
The Hatfield CFC is the oldest in the Ocado network. It current fulfills bout 20% of Ocado's weekly orders. These would be moved to its next generation facilities around the UK, which includes the soon to be opened CFC in nearby Luton, Ocado added.
Hatfield operations are scheduled to halt in the summer, in line with the start of operations at the Luton site.
The move comes after the company developed 'Ocado Re:Imagined' in 2022 to deliver higher CFC productivity and efficiency in Ocado operations.
Looking ahead, Ocado said it does not expect a material impact from the closure of Hatfield to its annual results guidance. Ocado expects further improvements in units picked per labour hour and customer experience, as well as increased capacity for same day deliveries.
Tim Steiner, chief executive officer of Ocado Group and chair of Ocado Retail, said: "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 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."
Ocado shares were up 0.9% at 510.40 pence each in London on Tuesday morning. M&S shares were down 1.2% at 162.70p.
By Sabrina Penty; Alliance News reporter
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