Ocado postpones expansion as online grocery faces shrinkage

The latest indication of a decline in demand for online food delivery is Ocado’s announcement to investors that it will halt the development of more automated distribution centres in the UK. According to a recent presentation made to analysts, two additional customer fulfilment centres (CFCs) slated to launch in 2024 and 2025 will be postponed. The business had previously issued a warning that it might not expedite a capacity expansion initiative implemented after its existing facilities were unable to be scaled up quickly enough to take advantage of the surge in demand during the COVID-19 outbreak.

The situation is reversed now that the virus has subsided and many customers have returned to the stores. For the first time in its history, it anticipates declining sales this year, but it has more capacity than it requires thanks to the opening of new warehouses in Luton, Bristol, and Essex.

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