Supply Chain

Tesco to slash 1,000 jobs in shake-up of distribution centres

Tesco has said that 1,000 people will be made redundant as part of an overhaul of its UK distribution network.

The grocer is set to reduce the number of distribution centres from 25 to 23, closing its Welham Green and Chesterfield sites.

However, the company is expected to create 500 new roles as part of the shake-up.

The changes are expected to be in place by June.

Matt Davies, chief executive of Tesco UK and Republic of Ireland (ROI), 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."

Tesco will be moving the grocery operations from its Welham Green site to an existing distribution site in Reading, where the workforce will be expanded.

It will also be increasing the staff size at its Middlesbrough centre, where the majority of its general merchandising will be located.

That move will result in the closure of its Chesterfield distribution site.

Tesco is set to bring its warehouse operations in-house, withdrawing from shared sites run by third parties like DHL and logistics management firm Wincanton.

Management structures will be “simplified” as part of the overhaul, the grocer said.

The news comes days ahead of Tesco’s third quarter results and Christmas trading update, with analysts forecasting relatively strong results.

Experts at Shore Capital believe the chain kept its sales recovery on track over the crucial Christmas season, putting its Big Four rivals in the shade.

Clive Black, at Shore Capital, predicts the group will have notched up its fourth consecutive quarter of rising sales around the holidays, with like-for-like growth of 1.25% to 1.75% in the three months to the end of November.

He said Thursday’s update may show slightly slower growth in the key six-week Christmas period, at 1.4%, after the group axed its Clubcard Boost promotion, although this is still set to be a winning performance against its main rivals.

It would also mark a step up from the 1.3% Christmas sales hike seen a year earlier.

But investors will be alert to any detail on the overall financial impact of October’s cyber attack on Tesco Bank, when hackers stole £2.5 million from the current accounts of 9,000 customers.


Photo from Rui Vieira / PA Wire

Shares