(Bloomberg) — Ocado Group Plc’s online grocery joint venture with Marks & Spencer Group Plc suffered a 11% decline in quarterly revenue, hit by disruption from a warehouse fire, the easing of pandemic restrictions and a severe nationwide truck driver shortage.
The unprofitable company said in a statement on Tuesday that it expects disruption from the fire to lead to additional operating losses of about 10 million pounds ($14 million) in the second half.
Shares in Ocado fell as much as 6.8% to the lowest in more than a year in morning trading.
The company also expects the truckdriver shortage in Britain will reduce full-year numbers by another 5 million pounds. Ocado said the higher costs are a result of raising hourly wages and offering sign-on bonuses to try and attract more staff.
British retailers have been struggling with a serious shortage of truck drivers for months now after thousands of drivers returned to the European Union following Brexit. The impact has led to shortages of some products in supermarkets, which could potentially get worse as the busy Christmas period nears.
The British company said the fiscal third quarter was one of two halves. Before the fire at a warehouse in Erith, England, revenue was only marginally down against a strong comparative quarter last year, when more people were eating meals in the home. However, after the fire — the second serious one for Ocado in three years — revenue declined by 19% in the remaining seven weeks of the quarter.
Despite the challenges, Ocado said it still expects the U.K. retail arm to deliver strong revenue growth for the year.
The company has opened three new automated warehouses in the U.K. this year, which should help improve logistics as online demand grows. It also announced plans Tuesday to open another warehouse in Luton in the south of England.
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