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Coles has announced that it plans to open two new automated distribution centres over the next five years.

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Suzannah reflects on recent last mile delivery updates from Australian retailer, Coles.

 

Just last month, Coles was piloting last mile delivery in conjunction with Uber. It’s now unveiled its latest partnership, with Deliveroo, to offer 30 minute deliveries to customers within a 3km radius of its store in Richmond, Melbourne. If it’s a success, the retailer could roll this out to the retailer’s wider network.

 

 

With competition heating up in Australia as Aldi grows and Amazon gears up to enter the market, it’ll be interesting to see how Coles continues to change and improve its supply chain to better meet the needs of an increasingly demanding customer base.
 

 

Coles has piloted a small-scale grocery home delivery service with Uber in Australia.

Becoming more agile

Coles has partnered with Uber’s UberRUSH brand, currently operational in several US cities. It will support customers who have missed items from their original online orders to be delivered same day, offering customers greater flexibility. This allows the retailer to be more agile and could ultimately speed-up delivery times. Coles currently has its own dedicated fleet of vans - it will be interesting to see if Uber's infrastructure can help Coles lower its distribution costs.

Why now?

Competition for online delivery for groceries in Australia is expected to intensify over the next 12 months, particularly with Amazon expected to enter the market. This threat is now larger than ever since Amazon bought Whole Foods Market last month, increasing its ability to blend online with offline retail extremely quickly.

Coles has reported sales growth of 0.3%, following a challenging year with supply chain disruptions.

Supply chain disruption

Coles' overall performance was impacted by ongoing price cuts that resulted in price deflation for the year of 0.8%, coupled with cost inflation and supply chain disruption caused by Cyclone Debbie. Its core business continued to see modest growth, aided by new store openings, with sales growth of 0.3% to AU$38,725m in the 52 weeks ending 25 June 2017, with EBIT declining 13.5% to AU$1,609m.

Investing in availability

Coles continued to make improvements through the year focusing on price, range, service, quality and availability, with a view on long-term sustainable benefits. The retailer continued to simplify its range, helping improve availability and put more emphasis on product innovation, plus invested in additional in-store hours and staff training courses.

Managing director, Richard Goyder, said: "In a very competitive environment, Coles invested in value, service, and better quality and availability in Fresh, to deliver continued growth in sales. Coles continued to execute its customer-led strategy, which it expects will provide a platform for sustainable growth in earnings and return on capital over the long term."

Presentations

19/09/2018
An essential summary of supply chain priorities, latest network developments, and other key statistics for Coles.
13/12/2017
We present IGD’s top five online trends that we expect to develop and shape the global market over the next 12 months and beyond.

In this presentation, we look at the key themes from IGD’s annual Supply Chain Summit and explore supply chain priorities for 2017 and beyond.

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