Marks & Spencer to open new logistics centre in 2019

Earlier this month, UK clothing and homeware retailer Marks & Spencer (M&S) announced plans to open a new mechanized distribution centre in 2019 as part of its strategy to further simplify its supply chain network.

This strategic decision follows the arrival of chairman Archie Norman in mid-2017, who described the retailer as “a business that has been drifting” for many years. M&S also delivered disappointing trading results in the important pre-Christmas period. Clothing and homeware sales dropped by 2.9% while food sales fell by 0.4%, and M&S’s online sales growth lagged behind its competitors at just 3% (compared to 8% for the fashion industry in general). Furthermore, the retailer suffered some embarrassing operational issues at its high-tech warehouse close to Nottingham, meaning it was unable to deliver certain festive products to customers in time for Christmas.

The plans to revamp its distribution network demonstrate that M&S is now taking decisive action to further modernize its supply chain to reduce costs and improve speed and efficiency. The new DC will be located in the county of Hertfordshire, just north of London. Operated by a third-party logistics supplier, it will serve 150 M&S stores in the region and employ more than 500 people. In a further move, M&S plans to close its current distribution centre in Neasden, close to London, which employs around 400 people – although the company denies that these two developments are directly linked.

The retailer has already made strong progress in its ‘Project 2020’ initiative, announced in 2009, having reduce its number of warehouses from 110 to today’s 19 distribution centres, but there are clearly still plenty of improvements to be made. These new plans form part of M&S’s ongoing attempts to create a ‘single-tier’ logistics system in which the retailer’s clothing and homeware products go directly from suppliers to a central warehouse and then straight to stores. This means that the retailer only moves products once, rather than multiple times as is currently the case.