Thursday 22nd Oct 2020 - Logistics & Supply Chain

Tesco centralises distribution to stores in China

Tesco is moving to a centralised distribution model in China where it now has 93 stores and four Lifespace Malls.

It has opened a 55,000 sq m logistics centre at Jiashan on the outskirts of Shanghai to optimise its distribution network by reinforcing the centralised distribution system.

The new site will distribute grocery and non-food products to 53 hypermarkets and 12 Express stores in East China and also deliver Tesco-brand products to four other regional distribution centres, making them available at all Tesco stores in China.

The aim is to cut out deliveries to stores from individual suppliers to ensure better control of product quality as well as reducing the total number of deliveries and the resulting carbon emissions produced by transport.

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The site incorporates a range of green technologies that uses renewable energy while reducing energy and water usage.

Tim Ashdown, chief executive of Tesco China, said: “The opening of the Jiashan Logistics Centre featuring the latest energy saving technology marks an important milestone in the ongoing delivery of Tesco’s climate change mitigation strategy in China, and sets a benchmark for our future projects.”

Tesco expects the site to use 45 per cent less energy, 40 per cent less water and emit 35 per cent less carbon than traditional logistics warehouses in China.

The move reflects the retailer’s growth in the region. Last month it announced a £30m investment in a new training academy in Korea which will train 24,000 staff a year to  support the growth of Tesco’s businesses in South Korea, Thailand, Malaysia, Japan, China and India which together employ over 100,000 staff and last year reported £11bn sales.

Speaking at the launch, chief executive Philip Clarke said: “We want the Academy to be known as a centre for training excellence and the facilities here are designed to make this a reality, building on our ambition to become an outstanding international retailer.”


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