Ocado shares fell to their lowest level in more than six years after a setback with a Canadian partner.
The online grocery and technology company said supermarket chain Sobeys decided to delay the opening of its fourth robotic warehouse in Vancouver.
It marked another dismal episode for Ocado, which sells automated warehouse technology and runs a grocery website in a joint venture with Marks & Spencer.
Tech blow: Ocado said supermarket chain Sobeys decided to delay the opening of its fourth robotic warehouse in Vancouver
The shares fell 12.1 per cent to 310 pence, the lowest level since late 2017. The shares are down 60 per cent this year and 90 per cent since their 2020 peak.
“Any share price gains generated by the hype around Ocado supposedly revolutionizing the grocery sector have now been wiped out,” said Dan Coatsworth, investment analyst at AJ Bell.
Rather than opening another robotics center for Sobeys in 2025, Ocado said it will focus its attention on increasing orders and sales at its existing warehouses.
And after six years a mutual exclusivity agreement between the London-listed company and Canada’s second-largest supermarket chain has also come to an end. This means that both of you can make deals with other partners.
In addition to its problems in Canada, Ocado is in a legal dispute with M&S over a disputed payment related to its joint venture partnership.
The share price drop is bad news for boss Tim Steiner, who needs to lift the stock to £29.69 to receive a £15m pay bonus within three years.
Coatsworth said that while Ocado was supposed to be “the magic ingredient” for other grocery companies to use robots, “it has only managed to sign a few new deals in recent years, despite the pandemic demonstrating the need for systems.” solid to support online demand’.
There have been signs of a change under new Ocado Retail boss Hannah Gibson.
Industry data this week revealed it was the fastest growing supermarket for the fourth consecutive month this month.
Information firm Kantar said online supermarkets were experiencing a resurgence after a post-pandemic lull.
Previously, M&S bosses were disappointed by Ocado’s dismal performance since the £750m merger in 2019.