UK supermarket chain Sainsbury’s has announced plans to invest £220m over the next three years to modernise and simplify its logistics and supply chain network.
The company will partner with three logistics providers, with each responsible for one key area of the network, in a move that could affect up to 7,000 jobs. Sainsbury’s will switch to three dedicated logistics partners, Wincanton, GXO Logistics and DHL.
Under the new arrangement, Wincanton will be responsible for most of Sainsbury’s transport operations, while GXO Logistics will partner with the company to run its frozen and fresh operations at several warehouse sites. Meanwhile, DHL Supply Chain will take on additional warehouse operations for Sainsbury’s general merchandise network, which includes Argos, Habitat, and Tu Clothing.
The supermarket chain stated that the network-wide reorganisation would improve availability and service for customers and that the investment would help modernise and improve sustainability within its logistics network.
Over the following two years, over 3,000 Sainsbury’s and Argos employees as well as 4,000 current third-party workers will transfer to either DHL, GXO, or Wincanton. The company has promised to engage with affected workers and unions over the next 15 months to make the transition as smooth as possible for everyone involved.
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.
Simon Roberts, Chief Executive Officer of Sainsbury’s
Despite the scale of the changes, Sainsbury’s has stated that the restructuring will not lead to job losses and will instead provide new career paths for employees. The company said that the move will provide better service and availability for customers.
Like other companies, Sainsbury’s is similarly aiming to reduce its carbon emissions to meet its reduction targets by 2035. The company’s shift towards a more simplified logistics and supply chain network is part of its sustainability strategy, which includes lowering carbon emissions, food waste, and plastic packaging.
