Ocado is building a new customer fulfilment centre (CFC) in Bristol, the companies have announced.
Ocado’s first “mini-CFC” will be able to process over 30,000 orders per week, serving customers in the city and surrounding area. They will be able to place orders for delivery the same day.
The building will be located in a 150,000 square foot warehouse in Avonmouth and will employ around 815 staff. It is expected to go online at the end of 2020 or early 2021.
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.”
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.”
Ocado plans for the smaller sites to complement its standard-sized CFCs in areas which are not suitable for the latter, allowing it to reach more households. These sites are also quicker to bring online.
Investment firm Jefferies recently said that Ocado’s US client Kroger had made a “poor and significant long-term capital allocation” misstep in adopting the Ocado model of customer fulfilment centres.
It argued that micro-fulfilment (MFC), in which smaller fulfilment centres are situated closer to the customers, offered a better return on investment than the centralised fulfilment model favoured by the Kroger-Ocado partnership. It said the former model was less capital-intensive and more easily scaled.
Jefferies argued that Walmart, which already uses the MFC model, was better placed to take advantage of the situation in the country.