Coles investing in new distribution centres

Date : 28 January 2019

Australian retailer Coles is set to invest almost AU$1bn over six years on automated distribution centres, one in Brisbane and another in Sydney.
Coles has signed 20-year leases to build two 70,000 sq m distribution centres. The two new sites will house state of the art technology and will replace five of Coles’ existing sites which will close over the next five years.

The warehouses will focus on dry groceries, rather than fresh or chilled foods, and will take up half the size of the existing storage facilities, whilst generating increased flow of stock to stores. The site in New South Wales will distribute to more than 240 stores, and the Queensland site will distribute to more than 170 stores.

Wide-ranging benefits

Steven Cain, Managing Director of Coles said, “This will provide a safer working environment for our team members, lower supply chain costs, enhance our overall business competitiveness and make life easier for our customers by having the right offer in the right location.”

The construction of the sites will take five years to complete, but changes in technology will be a “game changer” according to Matt Swindells, the group’s Chief Supply Chain Officer.

Automation driving efficiencies

Coles has partnered with WITRON Logistik + Informatik, a German company specialising in logistics automation. The partnership is designed to improve on-shelf availability (OSA) as part of a programme of modernisation across the supply chain that will also reduce costs.

The improvements in technology and automation within the distribution centre will create an enhanced experience in store as products will be packed and delivered for unloading at specific shelf spaces within store. There will also be a change from standard pallets to pallets designed specifically for aisles. This change will generate further time savings when replenishing goods at shelf.

Responding to competition?

In April last year, key rival Woolworths invested in a similar project to boost productivity and drive cost savings. It shared more information in September about the site which is due to open in February this year.

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