The Ocado warehouse automation platform is more advanced than that of Amazon, according to a UK investment house.
Peel Hunt analysts James Lockyer and Damindu Jayaweera said in an investor note that a recent visit to Amazon’s most technologically advanced European warehouse in Tilbury had left them “underwhelmed” compared to the technology of UK-based online grocer Ocado.
For one thing, they pointed out that Ocado’s robots move three times as fast as Amazon’s. They also used the example of Ocado being able to differentiate between the different ripeness of fruit as one area.
They also claimed that Amazon’s warehouses are less efficient due to spare capacity outside of peak season, with utilisation rates at 50% for most of the year and 90% between October and January.
The note advised clients to invest in Ocado, saying that the analysts believed “the management has the vision to take Ocado’s success today to become the Microsoft of Retail tomorrow”.
Ocado has two distinct business models. It sells its proprietary automation technology to retailers such as Casino, while also using this technology to support its own B2C grocery business. Recent customers include US grocer Kroger and Australia’s Coles.
The company has also recently declined to renew its deal to sell Waitrose products in favour of one with M&S.
Its Andover warehouse was hit by a major fire earlier this year, impacting revenues in the most recent quarter. It revealed last week that a malfunction with a charging unit for robots was to blame for the fire. The circular letter to investors said that a specific type of battery charging on the robotic grid had caused the plastic lid on a robot to catch fire.
Ocado said it had undertaken a number of safety measures to prevent another fire, including removing the plastic lid and introducing localised smoke detectors. In the future, the grocer will also add heat sensors in the storage grid.
