It brings together the operations of five distribution centres in Cape Town, and is split into three sections: ambient, frozen and chilled. The ambient section includes a “chocolate box” where temperature-sensitive items, such as chocolates, are stored.
Shoprite credits much of its success to its centralised distribution system and the fact that it controls its own logistics.
“It is not [just]a distribution centre, the centre is only one building. It is a regional complex. And what makes it more efficient is that you operate from one node, one location, and in terms of regional distribution you are able to do multiple temperatures. There are three big buildings on that site, plus workshops and transport and reverse-logistics infrastructure,” commented Photy Tzellios, general manager of supply chain at Shoprite Checkers. “We can do chilled, frozen and ambient going to a particular store. So instead of sending three trucks out to the store, we will be sending one.”
Tzellios said as much as 800 suppliers will be consolidated at the Cilmor facility, and their stock then distributed to Shoprite stores throughout the Western Cape province.
“The efficiency is really around inventory management – how you have stock available. Direct-store suppliers are only able to give us 65% of what we ask for. You order 100 cases, you usually get about 65. Out of these centres we are able to get in excess of 95%,” he noted.
“The other reality is you can’t find buildings of that… magnitude. You can find 2,000m² facilities, but you can’t find anything in the order of 76,000m² – and that’s just the one building at Cilmor.
Pieter Engelbrecht, Shoprite’s chief executive, last week presented the group’s annual results for the year ended 2 July at the Cilmor facility.
The Shoprite group currently operates 2,252 stores within South Africa, and 437 outlets in 14 other African countries. Shoprite’s core South African supermarket operation represents 72% of total sales and 79% of trading profit. In the rest of the continent, Angola and Nigeria continue to be the top performers.