Sainsbury’s to close Habitat stores to focus online; plans logistics consolidation

Supermarket group Sainsbury’s, the owner of digital retailer Argos and furniture brand Habitat, has announced plans to further integrate and transform its general merchandise logistics network in England with a proposed investment of around £90m, as well as moving the Habitat showroom solely online.

The proposal includes consolidating five existing Sainsbury’s and Argos depots into three, closing two depots by 2026, and further automating its Daventry site. The group has entered into a consultation process with 1,400 affected colleagues, including both Sainsbury’s colleagues and those who work for third party partners. Colleagues impacted by the proposals will have the opportunity to explore alternative roles within Sainsbury’s and Argos.

Under the plans, the sites proposed to close are the Basildon Distribution Centre and Heywood Depot, which serve Argos stores in the South East and North respectively. The retailer also proposes to make a major investment in further automating operations at its Daventry site, enabling a reduction of stock, more responsive delivery to customers and stores and a simpler delivery process for suppliers. At this stage it is not expected that the number of roles at Daventry will be affected.

These changes, together with the ongoing expansion of its Local Fulfilment Centre network across the UK, will create a simpler, more modern network to significantly improve availability, reduce stock and enable faster customer deliveries. The new three-site general merchandise network will improve productivity and the working environment, as well as increasing resilience and flexibility for the future.

The retailer also plans to launch a new digital showroom to help showcase Habitat products for customers who are increasingly shopping online. The three remaining Habitat showrooms will therefore close later this year.

The group said: “Sainsbury’s is currently talking to the small number of Habitat showroom colleagues about their options and will be supporting them alongside others affected by today’s announcements, again including exploring opportunities for redeployment where possible. Habitat will continue to play a key part in Sainsbury’s strategy and it will continue to invest in the brand, including the recently announced sponsorship on Channel 4.”

Separately, Sainsbury’s has also shared some changes to its property portfolio as it focuses on its save to invest strategy. In 2023, the retailer plans to close its office in Milton Keynes as it continues to adapt its ways of working to become more flexible, particularly following the pandemic. Closing the building, where on average only 11% of available desk space is regularly used by colleagues, will allow Sainsbury’s to save on its operating costs and reinvest the money where it can have a greater impact for customers. There will be no changes to the roles that colleagues perform as part of the closure and no Sainsbury’s colleagues will be at risk. It is proposed that affected colleagues would see a change from their current base location to an alternative, such as another Sainsbury’s office, in addition to being able to work remotely.

Simon Roberts, Sainsbury’s Chief Executive, commented: “As with any major change to our business, we have not taken the difficult decision to start this consultation lightly. As part of our plan to create a simpler business, we previously set out our intention to integrate our Argos and Sainsbury’s logistics networks. Over the last few years, we’ve been working hard to transform this network as we make our business simpler, more efficient and more effective for customers. This also allows us to reduce costs, so we can invest where it will make the most impact for our customers.

“We understand that this will be an unsettling time for affected colleagues, and we will support them however we can throughout this process. We will be consulting closely with unions and colleagues as we look to streamline the number of sites in our general merchandise logistics network.

“We are also announcing the significant investment we’re proposing to increase automation at our Daventry distribution centre. This combined with our ongoing plans to open more Local Fulfilment Centres will help us better deliver for our customers in the future.”

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