As retailers shift focus to online, warehousing is thriving
With major players investing millions in new warehouses in Britain, creating hundreds of jobs, this is an industry with huge potential
Adapt or die has been the rule of thumb for retailers during the Coronavirus pandemic, and much of it has centred on e-tail. Stores with a well-established online presence have continued to thrive during lockdown, and many have used this time to improve their websites.
Online sales in the UK have rocketed in recent months, across a number of categories. According to data released for the month of May by Bloomreach, online sales of grocery items were up 49% compared to May 2019. Online clothing sales were up 34.2% in the same period, while DIY online shot up 127.5% and digital sales of business supplies (such as hand sanitiser and gloves) were up 20.3%.
Such a rapid influx of sales has had a knock-on effect for the warehousing industry. With such a huge increase in the number of products being processed and mailed, there needs to be increased space to hold the stock.
This opportunity for the warehousing sector has not gone unnoticed. Property investor Warehouse REIT rents out 6.2 million sq ft of warehousing in locations across the UK, estimated to be worth £450.5 million. Yet with rising online sales, it feels there is a need for more space, so the company is currently trying to raise £175 million on the stock market by selling additional shares in the business. It plans to use the money to acquire more warehouse locations, and is already in negotiations to spend £346 million on new properties.
“During this period of unprecedented disruption, we have witnessed an increasing polarisation between different real estate sectors,” said Warehouse REIT chairman Neil Kirton. “The UK urban warehouse sector has proven itself to be firmly on the right side of this divide, as the structural trends underpinning the rapid growth of e-commerce have accelerated, supporting strong demand from occupiers seeking to futureproof their businesses.”
Another warehouse company well positioned to benefit from the boom in online shopping is Europa. Despite having to manage huge construction obstacles caused by lockdown, it has opened a £60 million warehouse at Midlands Logistics Park in Corby.
Europa has documented the building of the 715,000 sq ft facility in a series of weekly drone footage videos published on YouTube. Set in 25 acres of land, the ground floor of the warehouse is the size of seven Premier League football pitches. It has space for 100,000 pallets, and its warehouses are 18m high to accommodate three floors of mezzanines. The site also offers office space for companies looking to combine operations and logistics.
“Despite the lockdown, with all of its associated challenges, every single department at Europa has worked tirelessly to open our new site, from the recruitment team hiring a brand-new team of 120 [and doing] staff training, to designing and procuring IT and all of the operations,” said Europa Worldwide Group managing director Andrew Baxter, who acquired the company in 2016 and has since tripled its turnover. Its warehousing division, Europa Warehouse, made £18 million in 2019, up from £5 million in 2014.
With such heavy investment in the sector and words of optimism from major players like Europa and Warehouse REIT, it is clear that warehousing is a growing industry packed with opportunities. Free2Learn’s Warehouse, Supply Chain and Logistics courses can help you prepare for a career in this sector. Go to: https://free2learn.org.uk/retail-and-warehousing-course/ to see how you can master new skills that will make you stand out to employers.