Swedish furniture and homewares retailer Ikea has announced that it is contemplating closing its distribution centre (DC) in Peterborough, it was revealed today.
Ikea employs 111 people at the DC and as many as 52 job losses may occur from the plans, with 46 employees likely to be transferred to the retailer’s second centre in Doncaster and the others retained in the business.
With suppliers distributing more goods directly to stores over recent years, Ikea has decided it only needs one DC and the Doncaster site, run by external service provider BLG Logistics, will take over all of the retailer supply chain flow by May 2011.
An Ikea statement released today said: “The Ikea Group is continuously working to make our supply chain more efficient with the ambition to offer an unbeatably low price and keep our customer promise in terms of product availability.”
“The flow of goods through the Ikea DCs in Peterborough and Doncaster is decreasing and the forecast also shows that this trend will continue for the coming years.”
In November Ikea became the UK’s biggest seller of home furnishings and its total sales at Ikea UK & Ireland rose by 1.1 per cent to £1.2 billion in the year to August 31st.
Sales of big ticket items have been suffering for much of the year and most retailers in the sector have seen a reduction in trade.
Ikea’s redundancy plans are at a formative stage and the retailer did not say when a final decision over the Peterborough DC’s future will be made.
The statement continued: “We will commence with briefings today for affected co-workers, and then the consultation process will begin. It is proposed that all store distribution activity will cease at Peterborough by the end of May 2011.
“We will continue to keep our co-workers informed during the change process through joint consultation, individual consultation, unions, workplace representatives and regular information updates.”