SUpermarket giant Tesco is getting closer to upgrading its Kent distribution operation by moving into a huge Panattoni facility three miles down the road, CoStar News understands.
Matthew Barnes, Tesco's UK CEO, confirmed in an update on 29 January that the chain is set to launch a consultation on proposals to close its 265,000-square-foot Snodland distribution hub on Hays Road ahead of its move to a larger facility with new technology and improved facilities.
Although the Tesco chief did not give the name of the scheme, market sources told CoStar News its new distribution centre is at Panattoni Park Aylesford, the developer's Kent scheme which already houses big names like global logistics firm DHL.
The supermarket completed a deal for Aylesford 750 at the end of 2023 and will occupy around 610,000 square feet at the facility, more than doubling its space. Barnes said in a statement to the press: "The Aylesford site, situated three miles from our Snodland DC, is larger with new technology and improved facilities for our colleagues – and will support our growth long into the future.
"All colleagues at our Snodland DC will be offered a role at the new site."
Tesco announced in interim trading results in October that it was on track to open a chilled distribution centre in Aylesford in summer 2025. It said the site would "leverage robotic automation to streamline operations, improve efficiency and support" its customers' shopping experience.
The move is a significant upgrade for Tesco, with the new site more than twice the size of the previous one. CoStar data indicates that the Hays Road warehouse it is leaving is owned by Blackstone. Tesco signed a deal there 10 years ago.
It also chimes with a trend among industrial occupiers to jump to secure Grade A warehouse accommodation to achieve their environmental targets, improve working conditions for staff and use modern technologies, like automation.
Tesco also announced yesterday that it is looking to make hundreds of staff cuts as part of measures to "simplify" its business. The supermarket is looking to cut around 400 roles in total, affecting staff working at its bakeries, mobile phone shops and its head office in Welwyn Garden City, Hertfordshire.
It did not provide any information on whether it was considering its office footprint in Welwyn Garden City or at its stores.
Tesco chief Barnes added: "These are difficult decisions affecting our colleagues, but we believe they are necessary to enable us to invest in what matters most to our customers. Our priority is to support impacted colleagues, and we will do everything we can to help them find alternative roles within our business. Today, we have almost 1,000 vacancies available."
Tesco revealed it had delivered its "biggest ever Christmas" in an update earlier this month, with food sales up 4.7% year-on-year and online sales up 17.1%, which it said was driven by launch of same-day Click & Collect and home delivery.
Panattoni declined to comment and Tesco did not respond to a request for further comment.