Shares of Ocado Group PLC (LON: OCDO) have jumped on Thursday after the firm announced plans to open its first mini robotic warehouse.
Shares of Ocado jumped 1.80% to 1,187p. 28/11/19 11:29BST.
Ocado announced that the warehouse will open in Bristol by early 2021.
While Ocado’s retail business holds only a 1.4% share of Britain’s grocery market, its technology has powered the group’s 8.1 billion pound ($10.4 billion) stock market valuation, according to Reuters.
This has enabled it to secure partnership deals with supermarket groups around the world, including Kroger (NYSE: KR) in the United States.
“This is not about Bristol, but about what it says for its technology biz,” said Bernstein analyst Bruno Monteyne.
Ocado have seen a relatively pleasant time in financial 2019, as the firm saw its sales surge in an update provided in September.
The big supermarkets have seen a period of cut throat trading across the year. Firms such as Marks and Spencer (LON: MKS) and Sainbury’s (LON: SBRY) have seen their profits slump amid tough competition.
As the rise of brands such as Lidl and Aldi continue to dominate the UK industry, competitors such as FTSE100 (INDEXFTSE: UKX) listed Tesco (LON: TSCO) have developed non price competition methods to stimulate business.
The Bristol warehouse is being built on an 150,000 square foot warehouse, and will be expected to be fully operational at the end of 2020 or early 2021.
Bristol locals have been further excited as Ocado announced that this will create 815 jobs in the area.
The mini CFC will have the capacity for over 30,000 orders per week compared to about 85,000 orders per week expected from Ocado CFC 5, currently under construction at Purfleet, east of London.
“In the future, mini-sized CFCs can complement the standard-sized CFCs to build a fulfilment network including in areas not suitable for larger CFCs,” Ocado said.
“Despite its smaller size, we expect the Bristol mini-CFC to achieve productivity close to that in our standard facilities,” Ocado said.
