Woolworths to build $100m robotic warehouse in Sydney

Woolworths unveiled plans to build its maiden fully automated facility in Auburn in Sydney, saying it would be able to pick, pack and send 50,000 shopping orders a week.

The 22,000sqm fulfilment centre, slightly bigger than Melbourne’s MCG stadium, is still subject to NSW Department of Planning approval. If approved, it will support up to 250 full-time equivalent roles and around 440 jobs during construction.

The robotic fulfilment centre is slated to become operational in 2024 but that will be one year after two automated centres being built by Coles will open for business.

The online shopping arms race between Woolworths and Coles is heating up and both supermarket giants are pouring hundreds of millions of dollars into turbocharging their online shopping platforms.

Coles announced its own plans in early 2019, revealing it would spend up to $150 million over four years to beef-up its shopping platform to combat local rivals, announcing a tie-up with global automated fulfilment centre player Ocado. That deal will almost double Coles’ capacity to transact home deliveries from online orders, making it a new leading player in the online grocery shopping sector.

Now Woolworths is firing back, teaming up with Austrian group Knapp, which specialises in solutions in food logistics and whose key grocery customers include Rewe (Germany), Shufersal (Israel), Lotte Mart (Korea), Auchan Direct (France) and Albertsons (USA).

The fulfilment centre plans come as both Woolworths and Coles experience strong growth in online sales, which have accelerated since the emergence of the COVID-19 pandemic and that now demand further investment in infrastructure and facilities to keep pace with shopper demand.

Woolworths recently reported e-commerce sales growth of 92% for the December half with total online sales now accounting for around 8% of total sales. Last year Woolworths chief executive Brad Banducci announced plans to create four Woolworths micro-fulfilment centres situated on the back-end of existing stores, but the deal announced on Tuesday is the supermarket group’s first stand-alone automated fulfilment centre.

WooliesX managing director Amanda Bardwell said Woolworths has seen an extraordinary acceleration in online grocery shopping over the past year. The Auburn catchment area covered 2 million shoppers who are already well served by physical stores but that where there was high demand for online shopping services.

“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,” Ms Bardwell said.

“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.”

Subject to planning approvals, construction is expected to commence in 2021 ahead of the operational launch in 2024.

“We have watched the growth from an e-commerce perspective, we have seen it accelerate over the last couple of years, and last year in particular, and we will just continue to monitor each and every local catchment and we really want to think about how we can best serve local catchments in a very bespoke way,” Ms Bardwell said.

“We will always start with the store network and then where it makes sense supplement it with additional dedicated centres – and Auburn is our first automated one.”

This article originally appeared in www.theaustralian.com.au/property