Ocado to hire 2,000 staff in expansion

Ocado is is set to double its capacity with a second distribution centre in Warwickshire which will support up to 2,000 jobs, the online grocer said yesterday.

The £210m scheme comes after a turbulent few months for the company, which has seen its share price plunge as much as a fifth below its initial public offering price in July.

Ocado plans to build a 350,000 square foot "customer fulfilment centre" on the 35-acre site in Dordon that was once the Birch Coppice Colliery. The location is ideal for serving the Midlands and the North, according to Ocado, freeing up capacity in the group's existing Hatfield depot and enabling the company to expand its coverage from 66 per cent to 86 per cent of British postcodes across the country. It will also allow Ocado to increase its order capacity, the company said.

The scheme, which already has outline planning consent, is expected to be up and running by the end of 2012 and will start with a capacity of 120,000 orders per week, rising to as much as 180,000 orders per week once it is running at full tilt.

Ocado is paying £17.7m for a 999-year lease of the Dordon site, plus another £3.5m for the necessary utilities connections. The rest of the £210m price tag is for the construction of the depot. The project will be financed from current cash reserves and existing bank facilities.

Tim Steiner, chief executive of Ocado, said: "Ocado is growing rapidly across the country and this location ensures we will have capacity to provide more customers with the leading online grocery offering."

Although the most recent figures showed Ocado's gross sales up by 30 per cent to £127m in the three months to early August, the company is yet to make a pre-tax profit.

Ocado was floated at 180p a share in July, having been forced to cut the IPO price from an original range of 200p-275p. Its shares closed flat at 128.6p yesterday.