Woolworths to build automated distribution centres in NSW

Woolworths will invest up to $780 million in new automated and semi-automated grocery distribution centres in NSW.

The investment covers a fully-automated regional distribution centre and a semi-automated national distribution centre at Sydney’s Moorebank Logistics Park.

It follows a difficult three months for Woolworths, in which it was forced to suspend delivery and click-and-collect services for a month in response to panic buying to free up delivery resources.

Woolworths will spend between $700 million and $780 million on the technology and fitout of the two distribution centres - which are yet to receive NSW government planning approval - over the next four years.

The company has also signed an initial lease term of 20 years with Qube Holdings, which itself will invest between $420 million and $460 million to build the actual warehouses.

The “state-of-the-art" facilities will use the same “semi-automated and automated technology deployed at Woolworth’ Melbourne South Regional Distribution Centre”, which has been operational for the last year.

The warehouses, which will both be operational by 2024, will replace Woolworth’s existing regional distribution centre at Minchinbury and national distributon centre at Yennora, as well as the Melbourne national distribution centre.

Woolworths chief supply chain officer Paul Graham said the investment would “transform the way we serve our NSW stores, strengthen our network and deliver on our ambition to create Australia’s best food and grocery supply chain”.

“Cutting-edge automation will build tailored pallets for specific aisles in individual stores - helping us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling,” he said.

“The new facilities will also help progress our localised ranging efforts, with the ability to hold many thousands more products centrally than we can in our existing facilities.

“We’ve learnt a lot from our ground-breaking development at the Melbourne South Regional Distribution Centre (MSRDC).

“After hitting new volume milestones and dramatically improving the speed and accuracy of deliveries, MSRDC is now consistently supporting our Victorian stores - giving us confidence that now is the right time to invest in this new technology for our NSW network.”

A planning application seeking approval for the new facilities will be lodged "shortly" with the NSW Department of Planning, Woolworths said.

Woolworths said that for current staff at its existing distribution centres, it would offer "redeployment opportunities wherever possible with 650 roles available at the new Moorebank sites, as well as providing a wide range of support and career transition services to our team well before site closures" in 2025.