Woolworths to take on Amazon with its own fulfilment centre

Woolworths will partner with the Knapp Group to build its first automated online fulfilment centre in Western Sydney.

Woolworths at Maleny.

Woolworths will partner with the Knapp Group to build its first automated online fulfilment centre in Western Sydney. Woolworths, in a statement, said the venture would create up to 250 full-time equivalent roles for personal shoppers and management, with an expectation of the centre fulfilling up to 50,000 online deliveries a week.

The development application is still subject to NSW Department of Planning approval. If approved, the 22,000 square metre Auburn centre will support up to 250 full-time equivalent roles and around 440 jobs during construction.

The proposal will intensify competition with American retailer Amazon which is vying to increase its slice of Australia’s retail market at the expense of Woolworths and Coles. Amazon next year is expected to have six fulfilment centres operating in Australia.

The combination of robotics and automation will offer faster and bigger throughput of orders, and drive down costs.

Woolworths, in a statement, said it would build the facility in partnership with Knapp, whose automation technology would help Woolworths’ personal shoppers pick and dispatch up to 50,000 home deliveries a week in Western Sydney.

The plans come as Woolworths reported e-commerce sales growth of 92 per cent from July-December 2020. e-commerce sales now account for around eight per cent of total sales.

WooliesX Managing Director, Amanda Bardwell said: “We’ve seen an extraordinary acceleration in online grocery shopping over the past year.

“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. This fulfilment centre will deliver a step change in our online offer for our Western Sydney customers.”

Subject to planning approvals, construction is expected to begin in 2021 ahead of an operational launch by 2024.

Knapp Vice President Food Retail Solutions Rudolf Hansl said that the company had developed a highly automated and economical concept for online grocery.

“Our proven technologies enable fast and efficient customer order fulfilment. We’re very pleased to partner with Woolworths and look forward to working together for years to come.”