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, in a move that could affect up to 7,000 jobs.
The network-wide reshuffle will see the supermarket switch to three dedicated logistics partners, each responsible for one key area of the network, rather than relying on multiple contracts across its logistics chain.
Under the initial changes, which will be completed by 2024, Wincanton will take responsibility for most Sainsbury’s transport operations. Sainsbury’s will continue to run its own food warehouse operations, but will partner with GXO to run its frozen and fresh operations at several warehouse sites.
Following a restructure of its general merchandise network announced in February, DHL Supply Chain will take on additional warehouse operations for Sainsbury’s general merchandise network, which includes Argos, Habitat and Tu Clothing. The company will also continue to handle warehousing and transport for large item delivery.
The reshuffle will see around 3,000 Sainsbury’s staff transfer to either DHL, GXO or Wincanton over the course of 2023 and 2024, while 4,000 people currently employed by the providers will move between them. Sainsbury’s said it would work with affected employees and unions over the next 15 months.
“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,” said Sainsbury’s CEO Simon Roberts. “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,” Roberts added. “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.”
Sainsbury’s said the plans – which come as part of a £220m investment in aimed at modernising and improving sustainability within its logistics network over the next three years – would provide “better service and availability for customers”.
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