How Tesco Plans to Dominate UK Logistics by 2029

Tesco has confirmed plans for a major investment in a new distribution centre at DP World London Gateway, due to open in 2029. The new site forms part of Tesco’s long-term strategy to strengthen its logistics network and support a growing number of stores across the UK.

With a multi-million-pound budget, the move is aimed at preparing for future demand and reinforcing the reliability of its supply chain.

Tesco says the new distribution centre will be a “modern, energy-efficient site” that uses “the latest technology to support Tesco’s growth.”

The new site is also expected to achieve “BREEAM Outstanding” certification, a standard for buildings with low environmental impact.

BREEAM stands for Building Research Establishment Environmental Assessment Method and is a rating system used in the UK to measure a building’s sustainability. The “Outstanding” rating is the highest-possible score, awarded only to the top 1% of buildings assessed.

Tesco is teaming up with logistics company Witron, which has a track record of building retail-focused supply chain systems, to deliver the new project. The facility aims to handle dry grocery goods and forms a key part of Tesco’s plans to expand while meeting stricter sustainability targets.

Andrew Woolfenden, Tesco UK Distribution & Fulfilment Director, says the new centre will play a critical role in future growth: “Our distribution network is vital for ensuring customers receive products at the right place, time and condition.

"As demand grows across our store network, we're excited to partner with Witron and DP World to develop a distribution centre that leverages the latest technology, enhancing our supply chain and supporting our decarbonisation goals.

"By locating at London Gateway, we can also take full advantage of the seaport and rail infrastructure."

Helmut Prieschenk, CEO at Witron, calls it “an honour and pleasure” to be involved, saying: “With the latest technology and machinery, once fully operational, this represents a large-scale project for dry grocery distribution.

"In terms of end-to-end integration this is a lighthouse project for Witron - which ensures premium store service, an ergonomic, safe and sustainable environment and benefits the whole value chain.”

London Gateway’s growing profile

London Gateway already holds the title of the UK’s largest and most integrated logistics facility. The port handles more than two million containers annually and runs in excess of 60 weekly rail services. It also has 9.25 million square feet of logistics park space.

The site processes more than 50% of the UK’s deep-sea temperature-controlled imports and is home to many logistics and manufacturing operators. Current tenants include DHL, CEVA Logistics, Currys, COSCO, UPS and SH Pratt Group.

Sultan Ahmed bin Sulayem, DP World Group Chairman and CEO, says the investment marks an important step forward for the site. “DP World London Gateway is helping to make Britain’s trade flow by sea, road and rail, connecting businesses across the UK with global markets and boosting the resilience of national supply chains.

"The significant investment announced today by Tesco, one of the world’s leading retailers, is a proud moment for DP World and a vote of confidence in the growing role London Gateway plays in the UK economy.”

While the announcement signals long-term growth, the port is facing short-term pressure.

Disruption at London Gateway, caused by power failures, IT issues and rail damage, has reduced container handling capacity and caused delays across the network.

Port disruption casts shadow over early operations

Despite Tesco’s forward-looking plans, London Gateway is currently grappling with operational issues. A series of outages and equipment problems throughout late June have caused major delays.

On 26 June, only half of the port’s cranes were working. On 30 June, a rail shunter incident damaged infrastructure and halted rail services until 1 July.

As a result, more than 500 containers missed scheduled departures and the backlog is still affecting movement. Hauliers are reporting extended wait times and delays in container pick-up. One of the measures in place includes “Operation Stack”, which holds vehicles outside the port for over an hour before they can enter.

Wait times on the quay now stretch to five hours in some cases. Missed follow-up jobs, reduced fleet efficiency and rising operational costs are creating pressure across haulage companies.

Delays could lead to wasted journey charges if containers cannot be delivered and must be rescheduled, meanwhile some hauliers are introducing “London Gateway surcharges” and charging for time spent waiting beyond agreed thresholds.

Despite the disruption, the investment signals a long-term move to reinforce Tesco’s supply chain while aiming for lower emissions and increased reliability.