Ocado Group (LON:OCDO) and Ocado Retail Limited have announced the location of a sixth Customer Fulfilment Centre (“CFC”) in the UK to support the growth plans of Ocado Retail, allowing it to bring the market-leading Ocado customer experience to even more customers in the UK.
This will be Ocado Retail’s first mini-CFC and will be located in Bristol. The facility will have the capacity for over 30,000 orders per week compared to approximately 85,000 orders per week expected from Ocado CFC 5, currently under construction at Purfleet. As a result of the benefits of our unique fulfilment system, this facility is being built in an existing warehouse and is expected to go live at the end of 2020 or early 2021, so bringing new capacity into operation significantly faster than for purpose-built standard-sized CFCs. Despite its smaller size, we expect the Bristol mini-CFC to achieve productivity close to that in our standard facilities.
This mini-CFC brings further benefits to Ocado Retail as it creates the opportunity to serve all of its customers with a full grocery range direct from the facility. This means customers in Bristol and the surrounding area will have a wider range of options for delivery, including placing orders for delivery later the same day. It will also mean saving the cost of spoke sites, offsetting most of the additional costs of the supply chain.
In further developing a mix of different sizes of facility, Ocado is creating a unique and flexible ecosystem. In the future, mini-sized CFCs can complement the standard-sized CFCs to build a fulfilment network including in areas not suitable for larger CFCs. This will deliver long-term network benefits, enabling all Ocado Solutions partners to reach ever more households, while catering to the wide and growing range of shopping missions that customers expect to be served through online grocery.
The Bristol mini-CFC, consisting of a 150,000 sq ft warehouse in Avonmouth delivered by St. Modwen, is expected to support around 815 jobs in the local area.
Peter Davies, Development Director at St. Modwen Industrial & Logistics, said:
“Securing a customer of this nature is testament to the quality of our scheme, its prime location and confirms our commitment to speculatively build-out sites where appropriate. Across our parks, we’re able to cater to both leading national occupiers as well as small-to-medium-sized industrial and logistics businesses. Ocado Retail is a strong addition to our growing list of high-quality customers and the company’s developing offering in the South West will bring significant investment in the regional economy and support hundreds of new jobs.”
Tim Steiner, Chief Executive of Ocado Group, said:
“The Ocado Smart Platform is constantly evolving as we innovate to adapt to changing customer needs. We can now deliver the best customer experience across a whole range of customer missions, through CFCs, mini-CFCs, and micro fulfilment centres. Ocado’s technology is dynamic and constantly improving, delivered through tried and tested solutions with proven and attractive economics. Our mission is to deliver the future of online shopping today, and we believe we are succeeding.”