London, UK: GXO Logistics has won a contract to help Sainsbury’s run several fresh and frozen food warehouses following an overhaul of the retailer’s supply chain.
Sainsbury’s has simplified its logistics operations, moving to three dedicated partnerships across transport; food; general merchandise and clothing by the end of 2024. Previously Sainsbury’s had different contracts for different products in different locations.
Wincanton will handle the transport operations across most of the network. At the same time DHL will deal with the general merchandise network, which includes Argos, Habitat and Tu Clothing, as well as warehouses and transport for large general merchandise items for home delivery.
The company plans to invest £220m into its logistics network over the next three years to modernise operations, improve its fulfilment proposition as well as reduce the carbon footprint of its fleet which it says will help support the delivery of its carbon reduction targets by 2035.
The plan will see around 3,000 Sainsbury’s and Argos staff transfer to one of the three logistics companies. An additional 4,000, who currently work for one of the three, will move to another one of the partner businesses. Sainsbury’s stressed that nobody would lose their job or end up with worse contractual terms and that the move would mean service and availability are better for customers.
Chief executive Simon Roberts said: “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.”
