Ocado boosts capacity to meet demand

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Ocado is on budget and on schedule to open its Dordon Customer Fulfilment Centre in first quarter 2013 as part of its drive to increase capacity to match growing demand.

Gross sales volumes grew by 16.6 per cent for the year ending November 2011. However, the company said that customer demand had continued to exceed operational capacity. It has been investing in expanding its Hatfield site as well as developing Dordon.

Systems testing is due to start at the CFC2 facility in Dordon, Warwickshire this year. Tim Steiner, chief executive officer said: “We believe CFC2 will represent the single biggest increase in capacity by a grocery retailer for the online grocery market in the UK. It is a key driver in securing Ocado’s leading position in this fast growing market.”

Capital investment is increasing capacity at its Hatfield Customer Fulfilment Centre, which now delivers 131,381 orders in peak week. 98.3 per cent of orders were delivered exactly as ordered and 92.3 per cent were delivered on time or early.

Steiner said: “Increasing the capacity of CFC1 [Hatfield] to cope with the rate of sales growth has presented operational challenges. During the year several major construction projects have been carried out in the middle of CFC1 while the picking of groceries has continued, and I give credit for this to the planning and perseverance of our engineering and CFC1 teams.”

The company reckons that customers are switching from traditional grocery shopping to online ordering, as average orders per week at Ocado increased by 18.6 per cent on the 2010 figure.

Ocado produced an operating profit of £1.1 million last year – against a loss of £5.4m in 2010. Gross sales were up from £551.1m to £642.8m.

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