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Ocado and Morrisons agree to suspend Morrisons' capacity at Erith CFC

Online grocer Ocado has agreed with Morrisons that it will temporarily suspend Morrisons’ capacity at Ocado's newest customer fulfilment centre in Erith in south east London.

FOOD & DRINK

Ocado and Morrisons agree to suspend Morrisons' capacity at Erith CFC

Online grocer Ocado has agreed with Morrisons that it will temporarily suspend Morrisons’ capacity at Ocado's newest customer fulfilment centre in Erith in south east London.

The move follows the fire at Ocado’s fulfilment centre in Andover earlier this year which has forced the retailer to seek additional capacity within its existing network of centres.

While the suspension is in place, Morrisons stores will use Ocado's store pick solution to fulfil online orders. The Morrisons online business currently accounts for over 10,000 orders per week at Erith and has the right to 30% of the facility’s future order capacity. Morrisons will return to using its share of capacity in Erith in February 2021.

During the suspension period, Morrisons will not incur any of the costs associated with the use of Erith and will pay lower store pick fees.

In a statement, Ocado chief executive Tim Steiner said: "Morrisons is a valued partner of Ocado and we are glad that we have been able to come to an equitable and pragmatic agreement that is in the interests of both parties. We look forward to welcoming Morrisons back to Erith in February 2021."

In addition, both parties have agreed  to a mutual relaxation of certain exclusivity provisions to bring Morrisons more in line with the terms agreed with Ocado’sinternational clients.

David Potts, chief executive of Morrisons, said: "We are pleased to be helping our partner in times of need after the recent fire. We will keep growing Morrisons.com for our customers and save some cost, returning to the Erith CFC when it is more mature.”

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