Ocado, the online retailer and technology group, has paused the opening of a fourth warehouse with Canadian partner Sobeys, due to open in 2025.
The move, announced on Thursday, is a sharp setback, which sent shares for the British online grocer sharply lower.
Ocado’s stock was down 12% in early afternoon trading, after Sobeys announced that it would not open a customer fulfilment centre (CFC) – which Ocado calls its ‘automated warehouses’ – in Vancouver.
The British company noted that Sobeys and it would now focus on driving order and sales volumes across its three existing CFCs: in Toronto, Montreal and Calgary.
It will also use manual fulfilment solutions in nearly 100 stores.
Ocado and Sobeys have also agreed to end terms related to mutual exclusivity, meaning that they can now seek other partners.
The partnership deal between the two companies was originally signed in 2018.
Ocado has experienced significant growth in the past few months in the UK, though it still falls behind rivals in market share.
The chief financial officer of Ocado, Stephen Daintith, said in February that the loss-making group expects to make a pre-tax profit in the next six years.
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