Supermarket Distribution Secrets Revealed Just in Time

A select gathering of NfCG Individual and Group members assembled one autumn day early in October to explore the mysteries of supermarket distribution. Our hosts were NfCG Corporate Associate TESCO and we were at their Harlow Composite Distribution Centre, which is enormous.

Huge Lorries Everywhere

First impressions were of lorries everywhere. They were mostly huge articulated ones, some refrigerated, nearly all chilled. Cars were not allowed on site and there was strict discipline for the odd pedestrian brave enough to venture beyond the gate.

We were made very welcome by Sue Cosgrove, Trading Law Manager, Bob Braund, the site Planning Manager, and his enthusiastic team. It soon became very clear why there was need for a planning team. The site sorts out goods from many producers and wholesalers and sends it off to 74 different TESCO stores (there are 650 in the UK), using 98 huge articulated trailers. Composite sites, such as this one, handle fresh foods and frozen foods. Other sites handle dry grocery, non-foods (which include beer, wines and spirits) and what they called 'Medium Moving', that is goods for which there is a steady but not fast-moving demand.

No Storage

TESCO stores carry many lines of food with a short shelf life, so there is little point in having room for storage. Mostly, what you see is what they have got. But you will have noticed that shelves are constantly being replenished. Stores operate by receiving frequent deliveries from distribution depots such as Harlow, sometimes several, day and night. Store managers can tell at any time what goods need replenishing because tills record sales, which are compared with known quantities on the shelves and orders transmitted automatically to the distribution depots. The mind boggles at what would happen in the case of a complete system failure.

At Harlow there are three assembly areas, each the size of a jumbo aircraft hangar. One area is kept at ±12ºC, where fruit, bread, eggs, cakes and other produce are kept. The next, at +1ºC is for fresh meat and fish, butter, spreads, cheese and the sort of things you would keep in the fridge. The cold store (-26º) is for frozen foods. As you can imagine, keeping these areas at the correct temperature requires special doors and sealers. In the loading areas there are air-bag sealers between the insides of trailers and the bays, with the trailers being kept at the same temperature as the storage areas. A concept, difficult to grasp to start with, is that this depot is not a storage depot. Hardly any of the non-frozen products stay more than 24 hours and, in most cases, they are shipped out to the individual TESCO supermarkets in a much shorter time than that.

Cutting Back Packaging

Many of the products are packed in returnable strong green trays but still a large proportion arrive in variously sized packages. An understandable complaint is that the packaging waste regulations require them to show a reduction year on year but, though the green trays have reduced packaging considerably, their use does not count!

Consignments for individual supermarkets are loaded into tall tubular trolleys . There follows a complex system whereby all goods for a particular shop arrive in these trolleys in bays until a trailer load is made up and loaded. In the case of smaller stores, all their requirements for the day may be loaded into one trailer. In the case of the big ones, they may receive several trailer loads during the day and night. Some goods, such as milk, may be sourced locally.

TESCO has preferred suppliers for nearly all goods, with whom they build up good relationships and have long term business agreements. Testing of goods is carried out before arrival at distribution depots. Some imported goods come directly to the distribution depots, some go to a packer first.

We were told many interesting facts and figures. For instance, delivery volume varies by more than 100% between the quietest and the most busy day of the week. On the quietest, TESCO lends some of its tractor units to other distributors. On the busiest days, agency staff come in to help. Shopping patterns vary throughout the country which means that Harlow's busy days are not the same as those at other distribution depots. When Sunday Trading was allowed new staff had to be employed. Nowadays staff work rotating shift patterns of five weeks on, one off.

TESCO in Europe

TESCO has expanded into Eastern Europe. Its store in Hungary is bigger than any in the UK. However there are difficulties; some of the regulations that have to be met are truly Byzantine in their complexity. There are other TESCO stores in Eastern Europe and there is now a TESCO in Thailand. Many thanks to our Corporate Associate and all those involved in organising our visit.

John Brown

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