Shares in Ocado plummeted nearly 10% following the announcement that its Canadian partner, Sobeys, will shutter its robotic warehouse in Calgary. The closure is attributed to slower-than-expected growth in Alberta's online grocery market. This unexpected move has raised concerns about the viability of Ocado's technology within the North American grocery sector.

The Calgary facility's closure reflects a smaller market and weaker expansion than initially projected. While the Greater Toronto and Montreal sites continue to perform well, the Vancouver-area facility remains paused. Ocado expects £18 million in compensation this year but anticipates a £7 million reduction in fee revenue for 2025/26.

This situation follows other recent fulfillment center shutdowns in the industry and is likely to unsettle investors. Ocado's CEO, Tim Steiner, stated the company is taking a pragmatic approach to secure long-term growth. The company is also exploring additional partnerships, as exclusivity agreements in most markets expired in 2025.

Analysts are questioning the unit economics for grocery retailers implementing Ocado's automation. The Calgary site's annual revenue was estimated at roughly £8 million to £9 million. Investors are now watching to see how the company adapts its strategy in the face of these challenges and whether it can achieve positive cash flow as targeted.