Delivery costs for grocers fall to five-year low

2 January 2003
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02 January 2003

Average distribution costs for the UK's 14 largest grocery retailers have reached their lowest level in the past five years.

According to the annual Institute of Grocery Distribution (IGD) logistics benchmarking survey, distribution, which includes warehousing, transportation and administration, was 3.44 per cent of sales.

This is marginally below 1998's 3.46 per cent, and lower than last year's 3.86 per cent.

Peter Davey, supply chain director at IGD, attributed the fall in distribution costs to better collaboration between retailers and suppliers, reduced handling costs and increased use of radio tags that allow products to be tracked throughout the supply chain.

The survey also found that warehousing still makes up the bulk at 56 per cent of a retailer's costs and transportation costs are 35 per cent.

Retailers questioned for the survey included Asda, Boots, Co-operative Group, Tesco, Iceland Londis, Marks and Spencer and Nisa Today's.

• The IGD survey is available on its website at www.igd.com

SMjan2003

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