Tuesday, April 16, 2024

Drakes cuts the ribbon on distribution centre

Drakes officially opened its $125 million state-of-the-art distribution centre in South Australia this week.

Located in the northern Adelaide suburb of Edinburgh North, the 55,000sqm distribution centre has the capacity to house about 23,000 separate lines of products, with room for expansion.

Announcing the opening on social media, the group said “We’re investing $125 million of our private funds in South Australia to secure the future of our 6,000 employees, our suppliers, our business and our local economy. Most importantly, we’re cutting out the middle man in our distribution chain to provide our customers with more value through better buying.”

Competition for Metcash

Rumours of Drakes plans to service other independents and retailers began circulating as early as the announcement of the project in May 2018. Speaking with Retail World earlier this year, CEO Roger Drake said the distribution centre is being built to supply “a lot of people over time”.

“It’s not our initial plan,” he said of additional distribution. “Let’s just get through the first couple of years and if we’re competitive and if we can deliver an offer, there could be some opportunities then.”

The changes coming from Drakes this year are likely to ripple throughout the industry, a point Mr Drake acknowledges.

“Look, obviously for the first time ever, Metcash have an opposition,” he said. “They’ve never had it before. It’s going to be different. I think it’s going to be very challenging.

“From a supplier point of view, I think they’re going to find it fantastic. I just can’t believe the support that we’ve received from the suppliers. I think for the first time ever they’ll have another form that they can distribute through.”

Metcash began work on its own ‘best in class’ distribution centre in Gepps Cross, Adelaide, earlier this year.

Advanced solution

Drakes’ new distribution centre is claimed to be the most advanced independent distribution and logistics centre in Australia, cementing Drakes as the only 100 per cent South Australian family-owned and operated vertically integrated supermarket.

The completion of the project took 11 months, $125 million and over 400 people.

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