Ocado’s robot fire may cause lingering damage
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
LONDON (Reuters Breakingviews) – Ocado’s robot fire woe may smoulder long after the flames were snuffed out. The 13 billion pound grocery delivery group said on Friday it battled a blaze in its centre in southeast London https://www.ocadogroup.com/response-to-fire-at-erith, its second major incident in just three years. Chief Executive Tim Steiner said the fire appeared to have been caused by a collision of three robots on the warehouse’s grid system. Ocado shares fell 3% on Monday morning.
The incident raises short- and long-term issues. The company was forced to cancel thousands of customer orders, which will hit sales. The bigger question mark, though, is over the company’s technology, which it sells to the likes of U.S. grocer Kroger. Hopes for future demand are the reason Ocado’s enterprise value is about 170 times expected EBITDA for the year to November. New questions about safety could singe that valuation. (By Aimee Donnellan)
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