Tesco to spend £70 million on distribution
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• Tesco has unveiled £70 million plans for a new distribution system to operate from 14 regional depots, which it claims will cut distribution costs by 15%.
The depots — six yet to be built — will form the backbone of Tesco's plan to take deliveries from suppliers at regional warehouses rather than direct at stores. This strategy allows the company to maximise sales space in its stores by keeping as much stock as possible in the regional depots. Six regional depots are planned to carry all Tesco's fresh, chilled and frozen goods. These depots will be operated by contracted companies; Glass Glover in the North West and Scotland, and in the Midlands and the North East, the National Freight Consortium in the West and South West, and in central southern England, Hays Wharf in the South East, and Hunter Saphir in the East. Approximately 40 vehicles will operate from each regional depot.
Tesco will operate a further five depots nationwide which will distribute dry grocery goods, plus a single depot for the distribution of non-food products.
Two further depots, at Ninworth and Harlow and operated by lnterhond and Albany respectively, will be used as bonded warehouses.
Each of the six regional depots for fresh, chilled and frozen goods will be 23,225m2 in size and will be fully computerised, capable of handling 30 million cases a year.