Tesco to close two DCs and bring 3PL ops in-house

Tesco has proposed changes to its distribution network in order to run its business more simply.

The changes form part of a wider programme of transformation, which has been taking place over the last two years, to ensure Tesco is set up for the future in a rapidly changing retail sector.

The proposed changes will reduce the number of Tesco distribution centres from 25 to 23 in the UK and will include: 

• Closing Welham Green distribution centre and moving its grocery operations to the Reading distribution centre.

• Bringing the majority of general merchandising into one distribution centre at Middlesbrough, resulting in the closure of the Chesterfield distribution centre.

• Withdrawing from Daventry hanging garments shared distribution centre which is currently operated by third party DHL. Its clothing operations will move to nearby Tesco Daventry distribution centre.

• Bringing all warehouse operations that are currently carried out by DHL and Wincanton in house.

• Simplifying the management structure across all distribution centres.

It is estimated Tesco will make around 1000 people redundant in the process, but create 500 new jobs.

This includes new jobs at Reading and Middlesbrough distribution centres as well as the creation of colleague support roles in the majority of centres.

Matt Davies, Tesco UK&ROI CEO, said: “As the needs of our customers change, it’s vital we transform our business for the future.

“As part of this we are proposing to close two of our distribution centres in the UK. These changes will help to simplify our distribution operations so we can continue to serve our customers better.

“Our priority throughout this process has been our colleagues and we will continue to do all we can to support them at this time.”