Woolworths Group, in partnership with Qube, Australia's largest integrated logistics provider, has announced plans to invest in an automated regional distribution centre and a semi-automated national distribution centre in New South Wales (NSW).
Subject to NSW government planning approval, Woolworths said the two distribution centres will strengthen its supply chain and deliver the new capacity to help underpin the company’s future growth.
Woolworths will invest up to A$780m in the technology and fit out of the two distribution centres over the next four years. It has signed an initial lease term of 20 years with Qube.
Meanwhile, Qube will invest up to A$460m to build the warehouses and will target a five-star green star design by incorporating various sustainability initiatives, including solar PV systems, LED warehouse lighting and rainwater harvesting.
Both warehouses will build on semi-automated and automated technology that Woolworth’s Melbourne south regional distribution centre has been using for the last 12 months. The build of both warhouses is expected to be finished by 2024, with 650 jobs expected to be created once fully operational.
Woolworths chief supply chain officer Paul Graham said the investment at Moorebank would help transform the way Woolworths serves its NSW stores, strengthening its network and delivering on its ambition to create Australia’s best food and grocery supply chain.
“Cutting-edge automation will build tailored pallets for specific aisles in individual stores - helping us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling,” said Graham.
“The new facilities will also help progress our localised ranging efforts, with the ability to hold many thousands more products centrally than we can in our existing facilities.
“We’ve learnt a lot from our ground-breaking development [in Melbourne], [and it has] given us confidence that now is the right time to invest in this new technology for our NSW network,” he added.
In a statement, Woolworths cited infrastructure investments by the Australian and NSW governments at Moorebank Logistics Park as key to its site selection.
“The direct rail access to Port Botany will provide strategic benefits for Woolworths’ transport network and help remove at least 26,000 of its truck movements from NSW roads each year,” the company noted.
Qube managing director Maurice James said: “Woolworths’ long-term commitment will reinforce the commercial appeal of this nationally important infrastructure and freight project.
“The benefits of railing containers direct from Port Botany to a terminal co-located with warehousing across a site the size of the Sydney CBD will deliver Woolworths time and cost efficiencies. Our project team is looking forward to working with the Woolworths team in delivering an optimal solution for their operations.”
Once established, the Moorebank facilities will replace the current ambient operations at Woolworths’ Sydney regional distribution centre in Minchinbury, its Sydney national distribution centre at Yennora and the Melbourne national distribution centre in Mulgrave.
These sites are expected to close by 2025, however, temperature controlled fresh food distribution will continue out of the Minchinbury regional distribution centre.
Woolworths gains consumer trust during pandemic
Roy Morgan has released its latest ‘Risk Monitor’ results, with Woolworths named the second most trusted brand among Australian consumers. Wesfarmers-owned Bunnings Warehouse was named most trusted.
“It’s only a few weeks since we were in lockdown and desperately trying to get to the supermarkets for essentials," said Roy Morgan chief executive, Michele Levine. "Despite accusations of price gouging, delivery problems, and supply chain failures Woolworths rode the storm best and came out really trusted by Australians. It was on the front foot from the outset and that appears to have resonated with Australians."