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* Erith plant had fire on July 16
* Third quarter revenue fell 10.6%
* Estimated lost 300,000 customer orders
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By James Davey
LONDON, Sept 14 (Reuters) - British online supermarket Ocado
Retail said on Tuesday a July fire at its largest automated
warehouse in Erith, southeast London, cost it around 35 million
pounds ($48.5 million) of revenue in its latest quarter.
It was the second major fire Ocado has suffered in the past
three years. A huge blaze destroyed its robotic warehouse in
Andover, southern England, in 2019, requiring a total rebuild.
The Erith fire on July 16 damaged less than 1% of the
warehouse's grid system.
Ocado Retail, a joint venture between Ocado Group
and Marks & Spencer, said revenue fell 10.6% to 517.5
million pounds ($716 million) in its third quarter to Aug. 29
versus 578.8 million pounds in the same quarter last year.
Revenue had grown 19.8% in its first half.
Shares in Ocado Group were down 4% at 0717 GMT while M&S
shares were up 0.5%.
Ocado Retail 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 fire revenue declined
by 19%.
Taking account of the benefit of increased capacity at its
other warehouses, Ocado Retail estimated it lost around 300,000
customer orders due to the disruption.
Operating losses during the second half due to the business
interruption were forecast 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 at
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,
benefiting from a full year of capacity contribution from new
warehouses at Bristol, the re-built Andover and Purfleet and the
forthcoming opening of Bicester.
"We are looking forward to another bumper Christmas and an
exciting year of growth in 2022," said Ocado Retail CEO Melanie
Smith.
An additional warehouse, or customer fulfillment centre
(CFC) as Ocado calls them, will open over 2022-23 in Luton,
extending capacity to 700,000 orders per week.
($1 = 0.7220 pounds)
(Reporting by James Davey; editing by Michael Holden, Kate
Holton and Emelia Sithole-Matarise)
