BRADFORD (dpa-AFX) - Ocado Group plc (OCDO.L) said Thursday that it has reached agreement with Morrison(Wm.)Supermarkets plc (MRW.L) for a temporary suspension of the Morrisons.com capacity at Ocado's newest Customer Fulfilment Centre or CFC in Erith, South-East London.
After the fire in CFC3 in Andover in February, Ocado has been seeking additional capacity within its existing network of CFCs to allow the business to continue to grow, while exploring ways to replace the lost capacity from CFC3.
Ocado noted that Morrison's agreement to temporarily suspend using Morrisons.com's share of the capacity in CFC4 at Erith will give Ocado additional capacity to grow and thereby mitigate the impact of the Andover fire.
At the same time, Morrison.com can continue to grow by fulfilling orders from Morrisons stores using Ocado's store pick solution.
Ocado noted that Morrison.com currently accounts for over 10,000 orders per week at Erith and has the right to 30 percent of CFC4's future order capacity.
Morrisons.com will return to using its share of capacity in Erith in February 2021. The company will not incur any of the costs associated with the use of CFC4 during the period of suspension, and will pay lower store pick fees.
In addition, the two companies have agreed to mutually relax certain exclusivity provisions, bringing Morrisons more in line with the terms agreed with the existing international Ocado Solutions clients.
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