Coles to Incur A$120 Million Costs From Delays to New Fulfillment Centers

By Stuart Condie

SYDNEY--Australian supermarket operator Coles Group said it will incur 120 million Australian dollars ($76.9 million) in additional costs from construction delays to two new automated fulfillment centers.

The ASX-listed company on Friday said its Ocado Group-developed center in Victoria state would begin initial operations in the middle of its 2025 fiscal year, a year later than previously planned.

The other center in New South Wales state, also being developed by Ocado, will begin operations at the end of fiscal 2024. Coles previously expected operations to begin some time in the second half of fiscal 2024.

Coles said the delays will increase capital expenditure by A$70 million and operating expenses by A$50 million.

The project, which is designed to lower costs and improve efficiency, will now cost about A$400 million in capital expenditure. Coles said 55% of that had been incurred by the end of fiscal 2023, with the remainder to follow over the next two fiscal years.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

August 17, 2023 19:20 ET (23:20 GMT)

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