UK's Ocado shares lower after fire at biggest automated warehouse

LONDON (Reuters) - Shares in Ocado were 3% lower on Monday after the British online supermarket and technology group's largest automated warehouse suffered a fire, halting the fulfilment of customer orders from the site.

The blaze at its centre at Erith, south east London, on Friday was the second major fire at the group in the past three years.

Ocado said on Saturday the fire appeared to have been caused by the collision of three robots on the warehouse's grid system.

It said the damage was limited to a small section of less than 1% of the grid.

Ocado warned of "some disruption to operations" but said it expected the facility to resume operating this week.

A huge blaze destroyed Ocado's distribution centre in Andover, southern England, in 2019, requiring a total rebuild. That incident was caused by an electrical fault in a battery that caused a robot to catch fire.

Ocado said the Andover fire had no implications for the viability of the group's model. It has since signed several more technology partnership deals with overseas supermarket groups.

But a second robot fire may concern existing and potential customers of Ocado's technology.

The Erith plant serves Ocado Retail - a joint venture between Ocado Group and Marks & Spencer.

Shares in Ocado were down 3% at 1,749 pence at 0704 GMT, extending 2021 losses to 23%.

(Reporting by James Davey; Editing by Edmund Blair)