Ocado Hit as Canadian Partner Moves to Close Calgary Warehouse

UK based online grocery and technology group Ocado has suffered another setback after its Canadian partner confirmed plans to close a robotic warehouse in Calgary. The company said the decision was taken by supermarket operator Sobeys due to slower than expected growth in online grocery shopping across Alberta. The warehouse, known as a customer fulfilment centre, had been part of Ocado’s strategy to expand its highly automated model beyond the UK. The announcement weighed heavily on investor confidence, with Ocado shares falling sharply in early trading as markets reacted to renewed concerns over the scalability of its international partnerships. The closure adds pressure to a business that has struggled to translate its technology driven vision into sustained profitability in overseas markets.

Ocado said the decision reflected the limited size of Alberta’s e-commerce grocery market and a slower pace of consumer adoption than originally forecast. While the Calgary site will shut, the company stressed that other Canadian facilities remain operational. Warehouses serving the Greater Toronto and Montreal regions are reported to be performing well and will continue to operate, with new technology being rolled out to support faster delivery times. Plans for a separate facility in the Vancouver area remain on hold. The company said it was taking a more pragmatic approach to refining its network, focusing investment where demand is strongest and long term growth prospects are clearer.

The Canadian closure follows similar developments in the United States, where a major retail partner closed several automated warehouses last year, triggering a steep decline in Ocado’s market value. Once valued at more than 20 billion pounds during the pandemic driven online shopping boom, the company’s valuation has since fallen dramatically. Ocado said it expects to receive compensation linked to the Calgary closure but acknowledged that future fee revenues would be reduced. The group reiterated its focus on reaching positive cash flow in the next financial year as it looks to secure new partnerships now that exclusivity agreements in several markets have expired.