Supermarket group Morrisons will gradually end deliveries from Ocado’s automated warehouse in Erith, southeast England, the group said on Thursday.
It will instead increasingly use the online grocer’s site in Dordon, central England.
Ocado said Morrisons – a partner since 2013 – would also fulfil more online orders from its store network using Ocado technology.
The move means that Ocado Retail – a joint venture between Ocado Group and Marks & Spencer – has the option to use additional capacity at Erith, Ocado said.
The joint venture, which is Britain’s fastest-growing supermarket business according to monthly industry data, is approaching full capacity in its current network.
Tim Steiner, the CEO of Ocado Group, said, “As Ocado Retail moves towards full utilisation of existing capacity, this decision enables a helpful option to provide it with further short-term growth, without an expectation for additional capex.”
Online’s share of Britain’s total grocery market was about 7% before the onset of the Covid-19 pandemic in 2020.
It peaked at about 15% during the crisis, and currently sits at about 13% according to industry data.
Ocado said the cash impact of the changes was expected to be broadly neutral across 2025 and 2026.
US private equity firm Clayton, Dubilier & Rice has owned Morrisons – Britain’s fifth-biggest grocer – since 2021.
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