Retailers need more logistics space

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European retailers will need up to 25 million sq m of additional logistics space over the next five years, according to a report by Jones Lang LaSalle.

Demand is being driven both by the need to service existing stores plus the growth of internet shopping, which is transforming the way goods are distributed to customers.

With online sales predicted to almost double in the first half of this decade, e-tailing is creating new demands for warehouse space, including mega sites of over 100,000 square metres, specialist distribution centres and smaller, local delivery depots.

Online retail is expected to exceed ten per cent of all sales in Europe by 2016, and the JLL report, A new logistics real estate landscape, calculates that 3m sq m of specialised space is going to be needed for dedicated e-fulfilment centres, dealing solely with online demand.

Another 22m sq m is needed for store replenishment, though retailers are increasingly moving to a fully integrated “omni-channel” customer offer, where customers buy in-store, online or via mobiles and either have their purchases delivered to their home or pick-up from stores or dedicated delivery centres.

The study also revealed:

* Growing demand for mega e-fulfilment centres coupled with increasing demand for parcel hubs to handle delivery. Increased use of robots in warehouses to pick goods, normally working alongside exiting staff rather than as a replacement

* Greater use of dark stores to service online food orders

Many retailers have outgrown their existing supply chain infrastructure and are having to work out the best logistics model to service the growth of multi-channel retailing. Their strategy will depend on the type of products, the volume of internet sales handled and the speed at which these are growing,” said Paul Betts, Head of EMEA logistics & industrial at Jones Lang LaSalle.

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