Ocado shares drop as it cancels orders after robot fire

Ocado shares drop as it cancels orders after robot fire

Ocado shares drop as it cancels orders after robot fire

The share price of U.K.-based online grocery specialist Ocado has sunk to its lowest level in more than a year after it was forced to cancel thousands of orders following a fire caused by a robot collision at one of its warehouses.

Customers concentrated in London and south-east England have had food deliveries canceled after the fire on Friday at the fulfillment center in Erith, south-east London.

The company uses vast warehouses with robots criss-crossing a giant chessboard-style grid layout to sort its orders, rather than relying on human pickers. However, three robots crashed on Friday, causing the fire.

The company’s share price slumped by 4.6% on Monday to 1,720p, down from 1,805p when stock markets closed on Friday evening. That pushed its valuation down to a level last hit in May 2020, during the UK’s first Covid-19 lockdown.

Ocado shares still remain much more expensive than they were before the pandemic, as its expertise in home deliveries became more valuable to feeding the nation. Ocado sales soared by almost a fifth year on year in the six months to the end of May.

Ocado has partnered with U.S. retailer Kroger to build e-commerce infrastructure in the North American country, including fulfillment centers with its high-tech packing robots.

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