Sunday 23rd Oct 2016 - Logistics Manager

M&S drops £200m London Gateway development

Marks & Spencer has decided not to go ahead with the £200m distribution centre at London Gateway that it announced a year ago.

The 900,000 sq ft site was to have supported stores in the south of England as well as acting as a global shipping gateway.

Chief executive Marc Bolland said at the time: “London Gateway will become our third large distribution centre in the UK as we transform our logistics operations into a modern and agile supply chain, fit for the future of M&S.”

However, the retailer has now decided that “following a thorough review of our plans, we have taken a decision not to proceed with the site at London Gateway and have developed an alternative plan.”

Instead it will create a single tier distribution network based on its two national distribution centres, Castle Donington and Bradford by 2016-7. They will be supported by four of the existing regional distribution centres which will be converted into NDC use.

“This will use our capital investment more efficiently, with a planned £130m reduction in investment while largely retaining associated benefits,” it said in its annual results for the year to 29th March.

The Castle Donington site was launched last May and the company said it had been building capacity so that it now handled some two million singles each week. Some 90 per cent of e-commerce orders are now processed at the site.

“Activity at the site will continue to ramp up ahead of the peak trading season enabling us to make further improvements to our delivery proposition. “

M&S has also started the fit-out of the Bradford NDC. “The roll-out of Allocation and Replenishment, the first part in our GM4 programme, has also started in General Merchandise,” it said.

Marks & Spencer reported a 2.7 per cent rise in sales to £10.3bn with most of the growth coming from the food business. General merchandise was flat, and on a like for like basis fell 1.4 per cent. It said clothing sales returned to growth in the final quarter. However, underlying pre-profit was down 3.9 per cent to £623m.

Bolland said: “Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer. We are making solid progress on this journey and are now focused on delivery.”