Online supermarket Ocado has pinned a revenue dive over the last quarter on a fire at one of its London warehouses, in its latest trading update today.
The fire, at its south London Erith Customer Fulfilment Centre in July, cost Ocado some £35m in revenue, it said in a statement – the equivalent of 300,000 orders.
Revenue tumbled 10.6 per cent in the four months to 29 August, but the retailer forecast a revenue surge of more than 50 per cent had the accidental fire not occurred.
The incident also pushed an operating loss of some £10m, Ocado forecast, which will likely make the retailer more vulnerable to rising labour costs.
The online retailer, now a joint venture with Marks & Spencer, added that its Erith site is not yet at full operational capacity due to “temporary additional safety measures” Ocado put in place.
But it expects pre-fire capacity to be “fully restored” by the end of November, “for what we expect to be a strong Christmas trading”.
However, the climbing costs of labour, amid country-wide lorry driver shortages, is set to cost Ocado an extra £5m in its full year figures, as the retailer ups pay packets and sign-on bonuses in its bid to draw in more drivers.
Chairman Tim Steiner said: “Despite the challenges we faced in the period, I am delighted to report that Ocado Retail is performing well, improving the customer experience even further and continuing to grow the business in a post-lockdown environment.
“I would like to pay tribute to the efforts of all my colleagues who worked so hard to get Ocado back to business so quickly following the fire in Erith.”