Sainsbury's has launched a major restructuring and consolidation of its logistics operations which will affect around 7,000 staff, the retailer has announced.
The strategy will see 3,000 staff, who currently work for Sainsbury's, transfer to one of Sainbury's three logistics partners - DHL, Wincanton and GXO Logistics.
Another 4,000 staff, who currently work for one of the three logistics companies will move to another one of the partner businesses.
The restructuring will see different logistics contracts across the UK combined into just three contracts with each contract dealing with a different type of product.
In the past the business has had different contracts for different products in different locations. Now the contracts with its three partners will be nationwide.
Announcing the strategy, Sainsbury's said it will "move to three dedicated partnerships across transport; food; general merchandise and 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."
Wincanton has been awarded a significant five-year contract renewal and expansion with Sainsbury’s which sees it become the lead provider of transport services for the retailer.
Building on a 25-year relationship, Sainsbury’s will move transport services for most of its operations, including Sainsbury’s and Argos, and its central transport functions, to Wincanton. Wincanton will also welcome some 2,000 new colleagues from Sainsbury’s and its partners to join its 1,400 colleagues already dedicated to transport services.
Over the next 15 months Wincanton will work with colleagues, unions, Sainsbury’s, and its partners to support those who are impacted by the change.
By selecting Wincanton as its lead partner for transport services, Sainsbury’s will benefit from a simpler and stronger transport service which will provide better availability for its customers and will drive innovation and best practice across operations.
Wincanton’s proven experience and expertise in operating large-scale operations for major British businesses will also allow Sainsbury’s to be more agile and adapt quickly to an ever-changing external market. By operating at such significant scale, Wincanton will be able to drive modernisation, process improvements and efficiencies for Sainsbury’s.
Wincanton and Sainsbury’s will also work collaboratively to bring advanced technology to the operations, alongside upgrading the fleet. This investment will support delivery of Sainsbury’s carbon reduction targets by 2035.
Wincanton will remain responsible for the Sainsbury’s convenience store operations, servicing stores across London and the south-east of England. This is a continuation of a long-standing partnership where Wincanton has operated logistics for Sainsbury’s convenience stores since its launch in 2013.
James Wroath, Chief Executive Officer, Wincanton, said:
“We’re delighted to have been selected as Sainsbury’s trusted transport partner of choice. Today’s announcement is testament to the high level of service and innovation that we deliver consistently, and further strengthens our long-standing partnership. We look forward to welcoming our new colleagues to the Wincanton team and continuing to deliver exceptional service to Sainsbury’s.”
Additionally, GXO has been appointed by Sainsbury’s to become their dedicated warehouse partner in food
As part of changes to its logistics operations, Sainsbury’s will consolidate its Food warehousing from three different logistics partners to GXO.
GXO has had a longstanding partnership with Sainsbury’s, supporting the company’s sustainability agenda managing nine reverse logistics sites as well as a food warehouse. As part of the new agreement, GXO will expand its services to operate an additional six warehouses for fresh and frozen food nationwide, bringing its expertise in technology, tailored warehousing solutions and industry leading capabilities.
“We have enjoyed a great partnership with Sainsbury’s for several years and are thrilled to be named its dedicated food warehouse partner,” said Gavin Williams, GXO Managing Director, UK and Ireland.
“The partnership materially expands our relationship and is a testament to our expertise and our proven track record of operational excellence, customer service and innovation that drives performance and sustainability. We look forward to supporting Sainsbury’s at a national level through a more expansive, enhanced and innovative offering in fulfilment.”
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.
