Australia’s Coles Supermarket has recently inked a $400 million agreement with funding company Charter Hall for two high-tech sheds in Melbourne and Sydney. This move would boost the Coles’ effort to automate its supply chain, allowing it to speed up its home delivery services amidst this coronavirus pandemic.
The COVID-19 epidemic has compelled numerous households in Australia to adopt online shopping. This has substantially raised the pressure on retailing companies like Woolworths and Coles to ensure smooth deliveries.
Reportedly, Coles has inked leases for two new distribution facilities, spanning over 60,000 square meters, to automate its single pack home delivery system and accelerate its online grocery platform.
In the first half of its financial year, the Australian supermarket saw online sales increase by 24 percent. As for the March quarter, this growth diminished to 14 percent as the supermarket was forced to close down its online platforms for a particular amount of time due to some COVID-19-related issues.
Apparently, the warehouse deal follows Coles service agreement with Ocado Group inked last year to introduce the British firm’s automated fulfillment technology, home delivery solution, and online grocery platform to Australia. Prominent grocery retailers like Sobeys in Canada, Kroger in the US, Groupe Casino in France, Aeon in Japan, and Morrisons in the UK are using Ocado’s technology.
Speaking on the move, Steven Cain, Chief Executive Officer, Coles, said that the technology-led transformation would strengthen employment opportunities amidst the crucial time of COVID-19 where several businesses are witnessing a delay or cut in investments. Automation of online fulfillment would dramatically enhance customer service, ensure safety for staff, and reduce waste.
As per David Harrison, CEO, Charter Hall, Coles has signed a 15-year, pre-lease commitment for both the high-tech distribution centers in Melbourne and Sydney with end valuation being somewhere near to $400 million.