What’s the news?
On 23 February 2013, the first delivery left our
newly opened CFC2 in Dordon, Warwickshire.
In a little under two years, we had successfully
bought, built and delivered a fully functioning site,
based largely on our learnings from our existing
Hatfield CFC and Service Delivery operations.
Utilisation of the Dordon CFC ramped up since
opening ahead of internal expectations, and is now
starting to demonstrate its efficiency with a lower
picking cost per order than the Hatfield CFC.
How much did it cost?
The entire project will cost (following phase 2 capital
expenditure) over £230 million gross. Of this the
land and buildings account for just over £80 million,
although have subsequently been subject to a sale
and leaseback transaction as part of our agreement
The balance of the capital expenditure is for
mechanical handling equipment (cranes, conveyors
and storage racking) and technology investment.
Why is it important?
The opening of CFC2 ensures we can continue to
grow our business, as it will increase our fulfilment
capacity by over 180,000 orders per week.
It is also a significant demonstration of our
capabilities in designing, constructing and
commissioning a facility of this scale, with the
Dordon CFC now the world’s largest and most
sophisticated grocery “store”, surpassing the
Hatfield CFC for that title. The scale and complexity
involved were both significant, particularly in the
At scale, the Dordon CFC will improve the operating
efficiency of our business. The years of learning
that have gone into the design of this CFC,
combined with the latest automation and operating
knowledge will lower operating costs for fulfillment
to new levels. Although using the UPH measure of
efficiency Dordon CFC has not yet reached Hatfield
CFC levels, by the end of the period it was already
cheaper to pick an order in Dordon than in Hatfield
and we expect Dordon efficiency to continue to
improve with further utilisation.
The capacity it provides also played an instrumental
part in the structuring of another milestone event in
2013, the signing of our agreement with Morrisons
(see case study).
We will continue to utilise Dordon CFC as part of our
fulfilment solution for our retail business. We have
also utilised part of the capacity to launch the online
business for Morrisons.
We continue to review our expected capacity
requirements, including those required by
Morrisons, and will make further commitments as
appropriate. We continue to work on improving the
capital efficiency of our future fulfilment assets, with
the objective of making them more capital efficient
and quicker to construct and commission.