Sainsbury’s shifts significant logistics operations to 3PLs

The retailer will move to three dedicated partnerships across transport; food; general merchandise & clothing by the end of 2024, instead of multiple different contracts across the network. These network-wide changes will mean that Sainsbury’s can operate at a national level for the first time, as well as making best use of its partners’ expertise to provide better service and availability for customers, drive innovation and facilitate the sharing of industry best practice. The changes will also allow the business to invest further in modernising its logistics operations and improving customer service, in line with its food first strategy.

Transport operations for most of the network will move to Wincanton.

On the food side of the business, Sainsbury’s will partner with GXO across fresh and frozen at several warehouse sites, while the majority of Sainsbury’s own food warehouse operations will remain in house. 

Following recently proposed changes to the general merchandise network, DHL Supply Chain will take on additional warehouse operations for this part of the network, including Argos, Habitat and Tu Clothing. DHL will also continue to operate warehousing and transport for large item GM home delivery.

{EMBED(1254904)}

Under these plans, all impacted colleagues will be transferred to the new providers over the course of 2023 and 2024, and consultation is now beginning. Around 3,000 Sainsbury’s colleagues will transfer to DHL, GXO or Wincanton and around a further 4,000 colleagues who already work for these companies will also transfer between them. During the next 15 months, Sainsbury’s will work closely with colleagues, unions and partners to prioritise and support those who are impacted by these changes.

The move is the next stage of the retailer’s Transformation strategy and working with its partners, Sainsbury’s is planning to invest £220m back into its logistics network over the next three years, modernising and bringing advanced technology to its operations, upgrading and reducing the carbon footprint of its fleet, expanding capacity in key categories, and improving its fulfilment proposition. This investment will also support delivery of Sainsbury’s carbon reduction targets by 2035.

Sainsbury’s chief executive Simon Roberts, says: “We know these are big, bold changes and we have invested a huge amount of time planning this transformation to make sure it is successful. 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.

“We understand that this is an important announcement for affected colleagues within Sainsbury’s, Argos and across our logistics partners and we will support them through this consultation process. With these changes, our focus is on improving the service we offer our stores and customers, accessing global expertise, and providing new career paths for the future – no matter which partner our colleagues are working for.”