Woolworths announces plan to build first automated fulfilment centre

If Woolworths get the green light to build its new fulfilment centre in Western Sydney, it will be able to fulfil up to 50,000 home deliveries a week.

Australian supermarket giant Woolworths has announced plans to build its first automated fulfilment centre to speed up home delivery orders.

Subject to state government approval, the plans will see Woolworths construct a 22,000-square metre centre in Sydney's west at  Auburn.

The retailer boasted the new centre will feature automation technology from Knapp that will help Woolworths' personal shoppers pick and dispatch up to 50,000 home deliveries a week in Western Sydney.

"This fulfilment centre will deliver a step change in our online offer for our Western Sydney customers. With Knapp's world-class automation, our team of personal shoppers will be able to pick many more orders -- offering our customers faster delivery options and extra windows to choose from," WooliesX managing director Amanda Bardwell said.

The plans come as Woolworths reported online sales saw a significant jump of 92% to AU$1.8 billion in the half year to 31 December 2020. This represented 7.7% of its Australian food business sales that came in at AU$23.5 billion for the period.

"We've seen an extraordinary acceleration in online grocery shopping over the past year," Bardwell said.

"As we look ahead, we expect more and more customers will turn to the ease and convenience of home delivery to reclaim time in their busy lives. To keep pace with the demand, we need to innovate with new technology to boost capacity and ensure we're continuing to offer the best possible online grocery experience."

Read also: How tech helps with the spike of online retail (TechRepublic)

If Woolworths gets the green light to build the centre, construction is expected to commence this year ahead of plans to launch the centre by 2024.

Last year, Woolworths announced it would invest up AU$780 million in technology and fitouts over the next four years as part of plans to build an automated regional and distribution centre and a semi-automated national distribution centre at Moorebank Logistics Park in Sydney.

The new facilities at Moorebank will build on the automated technology deployed at the group's Melbourne south regional distribution centre.

It will also replace the current grocery operations at Woolworths' Sydney regional distribution centre at Minchinbury and national distribution centre at Yennora, and Melbourne's national distribution centre at Mulgrave. Temperature controlled fresh food distribution will continue to be serviced out of the Minchinbury centre, however.

On Wednesday, direct competitor Coles reported ecommerce sales grew 57% during the third quarter, attributing the growth to partly the launch of its click and collect "rapid" where online orders can be picked up within 90 minutes of being placed.

It also noted that construction of its automated distribution centre in Witron, New South Wales also commenced during the period.

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