Robots at work in Ocado Group's online grocery platform.

Home delivery surge puts focus on Coles' high-tech sheds

Simon Johanson|May 08, 2020

Coles is accelerating its push to automate its supply chain and speed up home deliveries in the coronavirus pandemic, signing a major deal with industrial landlord Charter Hall for two high-tech sheds in Sydney and Melbourne.

The COVID-19 outbreak is forcing many households across Australia to shop online, significantly upping the pressure on retailing giants like Coles and Woolworths for smooth deliveries.

Coles has signed leases for two new massive distribution centres, covering 60,000 square metres, to boost its online grocery platform and automate its single pack home delivery system.

The deal comes after Coles struck a service agreement last year with Ocado Group to bring the British company’s online grocery platform, automated fulfilment technology and home delivery solution to Australia, joining large overseas grocery retailers such as Kroger in the US, Sobeys in Canada, Morrisons in the UK, Groupe Casino in France and Aeon in Japan, who are already using the technology.

Coles chief executive Steven Cain said the technology-led transformation will support employment opportunities at a time when COVID-19 has seen many businesses cut or delay investments.

The online fulfilment automation, which includes new website technology for Coles Online, would improve customer service, reduce waste and boost safety for staff, he said.

Charter Hall CEO David Harrison said Coles signed a long-term, pre-lease commitment for two high-tech distribution centres.

The 30,000 squaremetre yet-to-be-constructed Melbourne facility will be in the Midwest Logistics Hub, a 58 hectare estate in Dohertys Road, in Truganina, on the city’s outer west. Another 30,000 squaremetre warehouse will be in Sydney’s Horsley Drive estate in Wetherill Park, a 14 hectare site being developed by Charter Hall.

Both sites are controlled by the Charter Hall Prime Industrial Fund.

“The on-going growth of e-commerce and the focus on supply-chain efficiencies continues to drive the demand for well located, high quality logistics facilities,” Mr Harrison said.