Feast or famine

THE MACROECONOMIC situation remains somewhat gloomy, with geopolitics continuing to provide a level of uncertainty that makes investors jittery. Not surprising, then, that very large-scale intralogistics automation systems are thin on the ground. There are some big projects out there, however, so it’s a case of feast or famine for UK material handling system suppliers and integrators.

Retail has been having a particularly challenging time, resulting in the recent disappearance from UK high streets of the likes of Claire’s, WH Smith and Quiz. Other brands – including River Island, Poundland, New Look, Hobbycraft and Homebase – have announced store closure programmes and related restructuring of their supply chains in recent months. This may well be the tail end of the post-pandemic recalibration of consumer demand and logistics networks. Certainly, a number of high-profile e-commerce warehouses have been mothballed since the peaks of Covid – ASOS in Lichfield, Boohoo in Burnley and JD Sports in Derby spring to mind.

It really isn’t all doom and gloom, though. Recent über-large projects in the UK include the highly automated distribution centre that Witron is equipping for TJ Morris (Home Bargains) in Doncaster; the new chilled warehouse being developed by Arla Foods and XPO Logistics in Daventry; Marks & Spencer’s £340 million investment in its food supply chain, also in Daventry; and Amazon’s commitment to invest a total of £40 billion in its UK infrastructure, including a new DC now open in Hull and three more underway in the East Midlands.

There’s no doubt that there is a long-term, strategic shift toward automation across the UK logistics estate. Companies increasingly recognise the need to replace outdated, labour-intensive facilities with future-fit automated and robotic systems.

The recent five-year high in UK unemployment figures – driven as it is by rising labour costs, including the hike in employers’ National Insurance contributions and the rise in the national minimum wage – only serves to underline this need to automate. What’s more, it is likely that the new Employment Rights Act, which is coming into force in stages during this year and next, will serve to accelerate this trend by tipping the balance of power in various aspects from employer to employee.