Sainsbury's shelf gaps blamed on pallet handling difficulties

By Rick Pendrous

- Last updated on GMT

Related tags Supply chain Supply and demand

retailer may have tried to achieve too much, too soon in Depots

Sainsbury's poor on-shelf availability may in part be down to an inability to handle less than perfect pallets at its new automated warehouses, according to one haulier supplying the depots.

Specific problems have been reported at Hams Hall, Birmingham, and Waltham Point, Essex, depots, but some logistics experts say the retailer just tried to achieve too much, too soon when it revised its supply chain operation.

"It was a very intensive programme, so they did not have the opportunity to design their processes to their way of working," said the haulier. "It does put an element of pressure on an operation like this.

"With their automated sites, they demand an almost perfect pallet. They are adopting a very strict policy of 'if it's not to standard, it's not coming in' and that's going to impact on on-shelf availability."

In July, Sainsbury announced that it was "implementing a number of specific measures to improve on-shelf availability". That meant the deferral of a planned depot closure and "operating with higher than average wastage levels". Its strategy had been to move from 21 depots to nine regional distribution centres, with two national distribution centres at Stoke and Hoddesdon, Hertfordshire, and two frozen food facilities.

Last month, new supply chain director Lawrence Christensen, formerly operations director for Safeway, was appointed on a 16-month fixed-term contract to drive through changes.

Meanwhile, chief executive Justin King is also conducting a review of Sainsbury's business, which will include looking at the supply chain operation.

He is expected to reveal more in a second quarter trading statement on October 19.

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