Sainsbury’s, the major supermarket chain, has announced a significant overhaul and consolidation of its logistics operations, with expected implications for approximately 7,000 employees. As part of this strategy, 3,000 current Sainsbury’s staff members will transfer to one of its three logistics partners, namely DHL, Wincanton, and GXO Logistics. Sainsbury’s will invest £220m over the next three years as part of a “bold” plan aimed at simplifying its logistics and supply chain network.
Additionally, another 4,000 employees from the three logistics firms will relocate to one of the other partner businesses. The restructuring initiative aims to combine various logistics contracts across the UK into only three agreements, with each contract catering to a different product category. This marks a departure from Sainsbury’s previous approach of having separate contracts for various products in different locations.
The company intends to transition to “three dedicated partnerships across transport; food; general merchandise and clothing” by the end of 2024. The proposed changes are expected to enable Sainsbury’s to operate on a national scale, leveraging the expertise of its partners to enhance customer service, improve availability, foster innovation, and facilitate the exchange of industry best practices.
The company has also highlighted its plan to invest further in modernising its logistics operations, with a focus on its food-first strategy. Under the new arrangement, GXO will manage several fresh and frozen food warehouses, while Wincanton will handle the transport operations across most of the network. DHL will oversee the general merchandise network, including Argos, Habitat, and Tu Clothing, as well as manage warehouses and transport for larger general merchandise items that require home delivery.
The grocery retailer previously set out a plan to integrate its Argos and Sainsbury’s logistics networks. The transformation also involves consolidation of some existing depots. For example in the Midlands, Saisnbury’s is consolidating five existing Sainsbury’s and Argos depots into three, with the Daventry site being further automated with a £90m investment.
Simon Roberts, Chief Executive Officer of Sainsbury’s said: “We believe our logistics and fulfilment operation will be one of our key competitive advantages in the future and today’s announcement will benefit our whole network through knowledge sharing and increased innovation. We’re confident that these changes will help us continue to invest where it will make the most impact for customers, now and in the future.”
Author: Paul Chapman
Source: Sainsbury’s
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