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LONDON, Sept 14 (Reuters) - British online supermarket Ocado
Retail on Tuesday reported a 10.6% fall in revenue in its
latest quarter, hurt by a July fire at its warehouse in Erith,
southeast London, which disrupted operations.
Ocado Retail, a joint venture between Ocado Group
and Marks & Spencer, said revenue totaled 517.5 million
pounds ($716.1 million) in its third quarter to August 29 versus
578.8 million pounds in the same quarter last year. Revenue had
grown 19.8% in its first half.
The JV said that over the first six weeks of the quarter it
performed in line with expectations, with revenue down 1.8%,
reflecting strong comparative numbers with last year when
ongoing COVID-19 pandemic restrictions drove demand.
However, in the seven weeks after the July 16 fire revenue
declined by 19%.
Taking account of the benefit of increased capacity at other
warehouses, Ocado Retail estimated it lost around 300,000
customer orders, or around 35 million pounds of revenue, due to
the disruption.
Operating losses during the second half due to the business
disruption, primarily lost orders, caused by the fire were
estimated at around 10 million pounds as Erith ramps back up to
full capacity.
The impact of stock and fixed asset write-offs and other
incremental costs associated with the fire were estimated to be
around 10 million pounds.
Ocado Retail also highlighted the rising costs of labour,
particularly for delivery and truck drivers.
It said that may result in an up to 5 million pounds hit to
full-year numbers, reflecting higher hourly pay rates and
signing-on bonuses.
The JV forecast "strong" revenue growth in its 2021-22 year.
($1 = 0.7226 pounds)
(Reporting by James Davey; editing by Michael Holden and Kate
Holton)
