Pick n Pay’s mammoth distribution centre – with big price savings in store

Pick n Pay has partnered with Fortress to develop a new R2.2 billion distribution centre in Eastport Logistics Park in Gauteng that will significantly lower the cost-per-case.

The new distribution centre in Eastport offers 50% more capacity than the current Longmeadow distribution centre that it will replace.

Apart from the additional capacity, the new distribution centre is estimated to lower the cost-per-case by 12% over the next five years.

Pick n Pay will purchase 60% of the distribution centre from Fortress for R1.6 billion once completed in the 2024 financial year. It will enter into a long-term lease for the remaining 40%.

The goal of the new distribution centre is to make Pick n Pay’s supply chain more centralised and aid in fulfilling its customer value project.

The customer value project, which is still in a testing phase, is aimed at broadening Pick n Pay’s customer base by entering into the premium retail space.

Pick n Pay tested the concept in five stores and recorded 18% average growth in these stores driven by store traffic and basket size.

The retailer aims to have 150 stores upgraded to the new format by February 2023.

Pick n Pay’s distribution centre in Eastport

Pick n Pay CEO Pieter Boone said the new inland distribution centre in Gauteng is a key investment that will give them a competitive advantage.

“The Eastport distribution centre will help us deliver key logistics and supply chain innovations, achieve efficiencies, and grow market share,” he said.

“Faster and cheaper service of our stores has never been more important to deliver on our customer promise of low prices and reliable service.”

To see why Boone is so excited about their new Eastport distribution centre, you have to look at the project.

This 164,470 square meter structure will include an ambient environment of 94,000 square meters and 46,000 square meters of cold storage. It will also contain offices and an area for returns.

The project includes a 3 MWP (Mega Watt peak) solar photovoltaic (PV) system, a 1 million litre rainwater storage tank, and automated throughout the facility.

It is the largest single-phase warehousing development in South Africa.

The images and photos below give an overview of Pick n Pay’s new distribution centre in Eastport Logistics Park.