Thousands of jobs are at risk after Ocado announced plans to close its oldest distribution centre.

The online grocer says it will close its site in Hatfield, Hertfordshire, later this year.

The warehouse handles around a fifth of its customer orders each week and these will instead be shifted to a new state-of-the-art automated warehouse in Luton, which is due to open this year.

Ocado said it has started consultation with the 2,300 workers affected but it aims to offer jobs to as many of them as possible at nearby sites, including the one in Luton.

Ocado Group chief executive Tim Steiner said: “As the online grocery channel grows, our new, enhanced fulfilment centres and technologies will drive a step change in customer experience and efficiency.

“With this capacity coming online, now is the right time for us to halt operations at our oldest facility at Hatfield and consider our future options for the site.”

He added: “We want to keep as much of this talent and experience within the business as possible and expect to retain a large proportion of colleagues impacted by these changes, either in our new Luton CFC (customer fulfilment centre) or across our wider UK network.”

It comes just months after Amazon revealed plans to shut three of its warehouses – a decision affecting 1,200 jobs – but open two new major fulfilment centres.

The Amazon sites eyed for closure are in Hemel Hempstead, Doncaster and Gourock, in the west of Scotland.