That's a lot of tomatoes! Ocado wants giant sites to increase capacity for grocery deliveries

By NEIL CRAVEN, FINANCIAL MAIL ON SUNDAY

Updated: 17:32 EST, 18 January 2014

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Expanding: A huge new warehouse is planned

Ocado has drawn up a shortlist of locations for a third giant warehouse that will increase its capacity for grocery deliveries by up to 50 per cent.

Bosses have found sites near Leeds and Manchester for a 350,000 sq ft automated warehouse. The online grocer has also begun a search for another massive facility in the South East, sources said.

Ocado finance director Duncan Tatton-Brown declined to comment on when it might open or where it might be.

Ocado plans to build the centre with its new supermarket partner Morrisons, which began sending out deliveries for the first time a week ago.

The pair’s £216million agreement last May has given Ocado new impetus for expansion that it hopes will attract foreign partners in Europe and the US to use its systems and software.

The company already has  a facility in Hatfield, about  15 miles north of London, and last year it opened a second in Dordon, near Tamworth, in Warwickshire. It plans to increase Dordon’s capacity this year by 50 per cent to about 180,000 orders a week. 

Ocado, which is premium supermarket Waitrose’s biggest customer, is expected to give further details of its plan when it issues full-year results on February 4.

It has several smaller warehouses, including in Leeds and Manchester. But these act only as places where goods arrive from its main centres, to be transferred to Sprinter vans and sent to customers.

While they increase the firm’s reach they do not significantly increase its order capacity because they do not directly receive and prepare orders.