Coles, a major Australian supermarket, will need to wait longer for its robot-powered warehouses to start operating due to construction delays. The company is working with British firm Ocado to create automated warehouses in Victoria and New South Wales. These warehouses aim to make online grocery shopping easier by addressing issues like short freshness periods for produce and out-of-stock items.
Coles had already mentioned potential delays in constructing these sites. Now, they’ve confirmed that these delays will increase the project’s costs by $50 million for building and $70 million for operating. The total project cost is expected to reach $400 million.
Ocado informed Coles about a delay in handing over the Victorian facility. There were construction problems with the warehouse’s automated technology grid that needed fixing. Because of this, the commissioning of the Victorian facility will be delayed, and the incremental ramp-up period will start around mid-FY25, which is later than initially planned.
The Ocado fulfilment center in New South Wales is still expected to open towards the end of the second half of the 2024 financial year, although it was previously set to open in the middle of the year.
These robot-operated delivery centers are part of Coles’ bigger automation plan, which also includes distribution centers using technology from German partner Witron to supply dry goods to stores. One such facility opened in Redbank, Queensland, and another is planned for New South Wales in 2024.
Coles will release its full-year financial results soon, where it’s expected to show resilience despite a challenging retail earnings season. People will be watching closely for information about profits and food inflation, as both Coles and its competitor Woolworths face increased scrutiny due to growing household pressures.
