Erith warehouse fire cost Ocado an estimated £35 million

The online grocer reported that the blaze, which was caused by its robots colliding, would hit its full-year profits by £10 million.

It took almost 12 hours for around 100 firefighters to bring a 'deep seated' fire under control at the major warehouse in Erith's Church Manorway on July 16 earlier this year.

Around 800 staff were evacuated from the south east London warehouse as firefighters worked in "hot and arduous conditions" inside, but no injuries were reported.

A spokesperson for Ocado said at the time that the fire was cause by “three bots on the grid” colliding as it apologised after being forced to cancel deliveries and block new orders.

The company downplayed the impact of the fire, saying that the correct protocols were successfully implemented and less than one percent of the grid was damaged.

The Ocado warehouse in south east London

But Ocado has now admitted that they lost around 300,000 orders as a result of the disruption, dragging their sales down by 19% over the seven-week period covering the fire.

Bosses also revealed they will face a further £10 million hit this year due to a fire at the company's warehouse in Erith, south-east London, in the summer which led to around 300,000 customer orders worth £35 million being cancelled.

Sales fell 10.6% to £517.5 million in the 13 weeks to August 29, in part due to the fire but also because of strong comparisons last year at the height of the pandemic.

The company said the period should be looked at in two distinct halves and that sales were only down 1.8% in the first six weeks - before the fire. The following seven weeks saw sales down 19%.

It was the third fire to hit an Ocado warehouse in three years, with its site in Andover, Hampshire, only recently returning to full operation two years after a blaze.

Despite the falls, Ocado said it signed up 64,000 new customers during the period, with 805,000 in total, and orders per week rose 22%.

However, the average basket size was down 12% to £124 compared with £141 a year ago.

Ocado have also announced they are to spend up to £5 million extra this year in pay rises, recruitment and signing-on bonuses for HGV drivers.

The online grocer said the shortage, caused by Brexit and the Covid-19 pandemic, has become "an increasingly important issue for the industry" and that it will try to mitigate costs where possible.

Bosses are confident the company can continue its strong growth, announcing that capacity at its warehouses in Hatfield, Hertfordshire, and Dordon, Warwickshire, have increased, allowing 600,000 orders a week to be completed.

They also announced plans to open two new warehouses in Luton and Bicester, which will allow the company to increase capacity to 700,000 orders per week.

Tim Steiner, chairman of Ocado Retail, said: "Despite the challenges we faced in the period, I am delighted to report that Ocado Retail is performing well, improving the customer experience even further and continuing to grow the business in a post-lockdown environment."