The global logistics firm employs the 420 workers on lease to Waitrose at its centre in Bardon, Leicestershire. The centre distributed ambient goods, chilled foods, fruit and vegetables for Waitrose.
The supermarket said it no longer needed to use the centre as the work could now be covered by other parts of its business.
In a statement issued to FoodManufacture.co.uk, a spokesman for Waitrose said: “We have been building capacity in our supply chain across the country in recent times to meet the needs of our growing branch network.
“We’ve added space in our distribution centre in Aylesford in Kent, a new chilled warehouse in Bracknell, Berkshire and increased fresh food capacity at Brinklow distribution centre in Milton Keynes. We’ve also opened a new non-food facility in Milton Keynes.
As part of this development, the supermarket chain will not renew its contract with Kuehne + Nagel.
Review of logistics needs
The end date on the original contract is May 31 2013 but this will be extended to September 1 2013.
A spokeswoman for Kuehne + Nagel said: “As part of a review of its logistics needs, Waitrose has decided not to renew its contract with us at the Bardon regional distribution centre beyond September 1.
“Our relationship with Waitrose continues at a number of other distribution centre sites, namely Theale in Berkshire and Celestia and Brinklow in Milton Keynes.
“We are in the process of consulting with our staff and, while this is ongoing, it would be inappropriate to discuss the matter further.”
Unite the union is representing the staff.
Councillor John Cotterill, who represents Bardon on North West Leicestershire District Council, told FoodManufacture.co.uk: “This is highly regrettable. We need this like a hole in the head. We’ve lost other jobs in the area recently at a car parts manufacturing plant.
“There’s always hope that someone will come along and take it over but it’s early days and there’s been no indication that’s likely to happen.”
The announcement came on the back of more bad news for the county of Leicestershire, as Jessops closed its doors for the last time causing the loss of 1,370 jobs in the region. Furthermore, the county council said it was looking to shed 1,100 posts over the next four years.
On a more positive note, Samworth Brothers announced last week (January 7) that the new manufacturing facility it was building in Leicestershire would create up to 700 jobs. However, new chief executive Lindsey Pownall said the factory would not be open until at least 2014.