Fire at Ocado's automated warehouse halts customer deliveries

(c) Sky News 2019: <a href="">Fire at Ocado's automated warehouse halts customer deliveries</a>

Firefighters are struggling to extinguish a blaze at one of Ocado's automated warehouses.

The online grocery firm's distribution centre in Andover, Hampshire, was evacuated at 2.45am and customer deliveries suspended.

Hampshire Fire and Rescue said on Tuesday evening that 120 firefighters with up to 20 vehicles, including aerial platforms, had been involved in the incident.

They are using specialist equipment to get to the seat of the fire - which is understood to be contained but not out.

Crews are expected to remain on site into the night.

The fire has affected machinery used to process orders - up to 65,000 per week when operating at full capacity.

No-one has been hurt and the extent of the damage remains unclear.

The robot-operated systems used in Andover have formed a major part of the company's business as the technology has driven several lucrative deals for Ocado, including one last year with the second-largest supermarket chain in the US .

Ocado said of the fire in a statement: "The incident and the measures being taken to contain it appears to have affected a proportion of the mechanical handling equipment and some of the grid.

A number of customers used the company's Twitter (Frankfurt: A1W6XZ - news) account to complain about failed deliveries.

A standard reply blamed "operational issues", adding that it was hoped deliveries would be "back to business as usual shortly". The Andover centre is one of only four distribution centres operated by Ocado in the UK.

Ocado's statement added: "Although some orders had already left the warehouse before the incident and will be delivered as normal, Andover suspended operation this morning preventing further fulfilment of orders.

"We will assess the damage this incident has caused to the Andover Customer Fulfilment Centre and will update further as appropriate."

The blaze began hours before the company revealed its full-year results which showed rising sales but deepening losses as it continued to invest in its systems.

Ocado reported a loss after tax of £44.4m for the 52 weeks to 2 December compared to £9.8m in the same period a year earlier.

Revenues were 12% higher at almost £1.6bn as active customer numbers passed the 700,000 mark.

The results contained no response to market speculation of tie-up talks between Ocado and Marks & Spencer (Frankfurt: 534418 - news) but did contain news of a one-hour delivery trial in west London.

Laith Khalaf, senior analyst at Hargreaves Lansdown (Frankfurt: DMB.F - news) , said the robot technology developed by Ocado had been a key driver behind a quadrupling of its share price in two years.

He said: "It's been a transformational year for the online supermarket, though its success won't show in bottom line for several years to come.

"Indeed Ocado isn't expected to turn a profit until 2020, and is one of the most expensive shares in the Footsie, reflecting the stock market's forecast of stellar long-term growth.

"That's because Ocado has managed to sign deals with a number of international supermarkets, to help them crack the online delivery market.

"A slick mobile app and huge robotic warehouses are behind Ocado's success, know-how which can be licensed out to international partners in need of digital expertise.

"Amazon's purchase of the grocery chain Whole Foods in 2017 probably helped too, by sending shivers through the food retail sector and flushing out deals with US, French, Swedish and Canadian supermarket groups," he said.