FUTURE MODELS OF RETAIL LOGISTICS IN AN AGE OF E-COMMERCE. Dr Alan Lewis Transport & Travel Research Ltd.

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1 FUTURE MODELS OF RETAIL LOGISTICS IN AN AGE OF E-COMMERCE Dr Alan Lewis Transport & Travel Research Ltd. 1. CONTEXT This paper presents a snapshot of the developments in logistics models to support e-commerce in the UK grocery retailing market. It was produced under the auspices of the Retail Logistics Task Force an independent group of practitioners academics and officials. It forms part of a wider consideration within the Department of Trade & Industry s Foresight Programme into the economic, environmental and social sustainability of e-commerce in the UK and its potential impact on the UK retail and transport sectors. The Retail Logistics Task Force reports to the Retail and Consumer Services and Built Environment and Transport Foresight Panels. Recent Reports produced by the Foresight Programme are available on The objectives of this study, published in June 2000 were to: Review the distribution models being developed in the UK to satisfy home delivery of electronic orders in the grocery sector. Investigate how closely these models are integrated into the existing grocery distribution system. Investigate industry s expectations of demand for grocery e-commerce and compare these with scenarios already developed for the Foresight programme. Establish the factors that determine the breakeven point for home delivery of electronic customer orders in the grocery sector. Assess the potential for streamlining different ordering options within a single distribution network. These issues have been investigated through discussions with retailers, logistics providers and producers involved in direct distribution in this sector. 2. STUDY BOUNDARIES The grocery sector was chosen because it is known to be market leaders in adopting e-commerce solutions and has had a reputation for having a sophisticated distribution in the UK. Grocery purchases impact upon all members of society. Purchases are made frequently and the goods are often bulky and perishable. Individual grocery retailers have established a complex,

2 streamlined distribution system, which will need to adapt in response to the demands of e-commerce. The Retail e-commerce Task Force report, Clicks and Mortar developed four scenarios for the development of e-commerce in UK retailing by 2005 with the following characteristics: Explosive (Market size: 30 billion) Rapid growth in a wide range of information society activities, including e- commerce. Government policy promotes access to the internet and other digital technologies. In addition to mainstream services, specialist suppliers are able to cater for niche markets and supply goods competitively to rural areas. Frequent e-commerce access, 50%; occasional access, 90%. Dynamic (Market size: 25 billion) High growth in the retail e-commerce sector. General success of initiatives to promote access to information technology, although resistance exists from certain sectors of society, who are as a result excluded from some new services. Many retailers adopt a mixed portfolio using existing stores for attracting customers to both traditional and new purchasing channels. Frequent e-commerce access, 37.5%; occasional access, 75% Active (Market size: 10 billion) High growth in retail e-commerce driven by a limited proportion of the population who are open to technological advances. Access to goods is not spread across a wide spectrum of new communication technologies, further limiting retail opportunities. Frequent e-commerce access, 20%; occasional access, 50% Sluggish (Market size: 5 billion) Low uptake in retail e-commerce with a number of access, service and economic factors combining to restrict interest. Frequent e-commerce access, 10%; occasional access, 30% Based on the findings presented in the main body of the paper, the final section presents a number of challenges and opportunities to ensure that this sector expands in a sustainable manner. 2.1 Transport Boundaries Figure 1 shows the many generic paths between factory and consumer. Responsibility for transport can rest with the manufacturer, retailer, customer or a third party at almost any stage of the distribution chain. E-commerce will shift responsibility for transport. For example, so that stocks were sent

3 directly from the manufacturer to the consumer thus by passing the retailer or conversely by the evolution of a new generation of retailers. Figure 1. Schematic Diagram of Potential Transport Links Between the Manufacturer and Consumer. Retailer s RDC Shop Manufacturer Wholesaler Customer Third Party delivery There may be scope for consolidating e-commerce deliveries. However extra vehicle kilometres may result in the following circumstances: If additional logistics chains are introduced for e-commerce with no corresponding reduction in the existing distribution system. Internet shopping offers the opportunity for purchases from a global marketplace. This could result in transport over longer distances, especially if suppliers insist on a centralised warehousing strategy on a global basis. With any form of home delivery there is a risk that the supply chain is left incomplete if the consumer is not available to receive the goods. Changes in transport links have the potential to change private vehicle mileage. The greatest potential is for a reduction in the number of shopping trips carried out by households. However, this may not be achieved: 1. If shopping is included as part of another trip which would still be made; 2. If time freed from shopping is used for other trip-generating activities. Additionally, a transfer of commercial traffic from town centres to residential areas is likely as home shopping expands. The degree of transfer will depend on several factors including the distribution mechanisms used and the extent to which home shopping replaces or is additional to conventional shopping.

4 2.2 Social Boundaries The starting point here is a true understanding of consumer journeys. Are there certain products or services that are accessed on single purpose journeys? What types of products tend to be combined within a single trip? The weekly grocery shop provides an example of a single purpose journey. However, the trend for city centre grocery retailers to provide home delivery services allows grocery and more general shopping to be combined. Perhaps the key aspect is the role that shopping plays in allowing social interaction. If this is significant, people are likely to travel anyway and e- commerce will have little overall impact. However, removal of the need to carry goods may allow a different modal choice to be made, providing suitable public transport is available. 2.3 Policy Boundaries Providing access for all to new services through the internet and other new communication technologies has become a core element of current Government policy. The success of such initiatives will undoubtedly affect the uptake of e-commerce. Government has also recognised the need for, and has begun to investigate, sustainable distribution strategies. The uptake of retail e-commerce and the management of the supply of goods to the consumer will in turn impact upon the environmental and on local communities, so determining future pressures on government at all levels in years to come. 2.4 Business Drivers Grocery retailers have moved into e-commerce because they believe it will form a substantial part of the future market. Entry to the e-commerce market appears to be based on three business premises depending on the characteristics of the individual retailer: 1) Gaining new customers is the rationale driving several retailers who have either a regional presence or a demographic customer base different from that currently associated with easy internet access. 2) Retailers that have a low average transaction value perceive e-commerce as a way of increasing sales from existing customers, as demonstrated for home delivery of in-store purchases. 3) Retailers who have a stable share of the market are worried that competitors who offer an e-commerce solution may tempt away a proportion of their customers who would otherwise be satisfied and so are ready to compete in this market to secure existing customers. Business cases two and three will inevitably result in a switch of customers from conventional stores to e-commerce. This may impact upon the

5 profitability of existing stores (Investec Henderson Crossthwaite). This could have a negative impact on the availability of retail facilities in deprived neighbourhoods, and so act against recent government initiatives (Department of Health). 3. GROCERY LOGISTICS MODELS 3.1 Supermarkets UK grocery shopping is dominated by a relatively small number of retailers with sophisticated distribution chains that balance consistent product availability with optimisation of business costs. Figure 2. Schematic Diagram of a Typical UK Supermarket s Distribution Chain. Suppliers: RDCs: Chilled lines & produce Slow moving lines Chilled, ambient & produce Frozen Goods Stores: X Y Z The typical distribution chain uses regional distribution centres (RDCs). Items with similar properties in terms of size, temperature control, lifetime and level of throughput tend to be considered as product groups within the distribution chain. The facilities available at individual RDCs vary so that different products may pass through separate RDCs on their way to the same store; i.e. a particular store may receive its chilled products, fresh produce and ambient items from one RDC and frozen goods from another, as shown in Figure 2. Additional direct distribution of fresh goods such as bread and milk from supplier to store might comprise 5-7% of total store throughput. Most retailers are trying to increase the efficiency of their distribution system to reduce costs (DETR Energy Efficiency Best Practice Programme). For example there is limited evidence that some retailers are occasionally carrying goods for their competitors under contract, rather than operating empty vehicles.

6 3.2 Home Distribution Models Customers select goods and pay at the checkout as normal. Purchases are then left for controlled storage on site and delivery in a selected time slot. Service characteristics vary between companies. Home delivery has developed because it allows retailers to increase the size of the orders placed. In order to be successful the increased margins that result from extra sales must more than offset the additional costs that result from home delivery. In logistics terms this is an intermediate step between traditional shopping practice and grocery e-commerce. Retailers have been able to investigate the mechanics of home delivery and the impact of such services on transaction values. In many cases delivery is contracted out to a specialist logistics provider. The retailer concentrates on its core competences. The delivery vehicle, but not necessarily the driver, is branded in the retailer s livery 1. The cost of operating home delivery is relatively high, especially in small volumes. Retailers find that the explicit delivery charge does not cover the cost of delivery. However, average transaction values of around 80 for home delivery orders have been observed compared with for store transactions. Hence it is possible to see how home delivery can pay for itself through extra profits even if the delivery charge itself is inadequate to cover costs. It may appear that home delivery does not impact upon customer travel behaviour because purchases are made in store, just as if the customer were to take them home. However, customers who no longer need to carry bulky items may use a different mode of transport to access the shops. 3.3 Current E-commerce Distribution Models The major grocery retailers are incorporating e-commerce logistics into their existing distribution chains. Two logistics models for grocery e-commerce are in current use in the UK. One involves picking goods from within existing stores and the other uses picking centres (e-fulfilment centres) specifically designed for e-commerce orders. Store-Based Order Picking Store based picking makes use of the existing distribution chain. It delivers goods that have been transported to local stores through the existing network of RDCs. However, it may impact upon overall transport flows. There is the increase in retailer s miles due to the home delivery element (which may be partially, exactly or over compensated for by reductions in private transport miles to the store). More deliveries may be needed to supply the store if use as an e-commerce picking centre increases total store throughput. Use of the existing store network to service e-commerce customers provides several benefits:

7 The initial investment is low because there is no new distribution centre or transport links. The timescale between the initiation of the project and its opening is short. The existing store network provides access to a high proportion of the population. It provides an extra function that can occupy staff and store resources at quiet times. It builds upon the existing relationship between the customer and the local store. Figure 3: Logistics Model for Store-based Picking of E-commerce Orders Suppliers Existing RDCs specific fresh goods +others Call centre Internet/ Phone/fax Stores Customer Customer Customer However, some retailers who have tested store-based order picking found that it produces conflicts between in-store shoppers and supply of e-commerce customers. Dedicated Order Picking An e-fulfilment centre is at the same level of the distribution hierarchy as a store. Opening such a centre has the same impact as opening a new store in terms of upstream transport links. At the current level of investment e- commerce picking centres will cover a much wider catchment area than existing supermarkets. This will result in relatively large distances being travelled by vehicles containing picked orders. Some retailers are considering

8 using van centres - developments away from the picking centre where goods may be stored in the short term before being transferred to local delivery vans. Figure 4: Logistics Model for the E-fulfilment Centre Route Suppliers Call centre Internet/ Phone/fax Existing RDCs Order picking centre specific fresh goods +others trunking trunking Van centre Stores Van centre Customer existing store delivery Customer Customer The benefits to the retailer are: The ability to focus on a single purpose leading to improved order fulfilment because stock arriving at the picking centre is guaranteed as available to e-commerce customers. Zero effort or cost for marketing goods at the point of picking. Reduced overheads because operations for a wide catchment area concentrated at a single site. E-fulfilment centres require considerable investment, although costs are lower than for equivalent stores as retail planning permission is not required. Companies that have chosen this option have tended to test the local market, believing that demand in their chosen areas will result in effective operation within a couple of years. They will use the observed levels of demand to judge the need for further expansion to other areas or to reinforcement of services in their initial operating area. In the latter case a second picking centre would be opened and the area divided into two. This would reduce the vehicle kilometres travelled by the delivery vehicles. Hence, the e-fulfilment centre route begins as relatively inefficient in terms of transportation, but would improve as demand drives a greater density of picking centres within a given area 2.

9 3.4 Possible Extensions to Current E-commerce Grocery Distribution Models Mixed Centres The current models are likely to become blurred as retailers experiment to find the optimum methods for their operations. An example could be existing supermarket locations with an imbalance between storage and retail sales space. Rather than increasing the proportion of retail space within the unit, an alternative could be to develop an e-fulfilment centre for local deliveries. This would remove the conflict between in-store and internet customers from the front of store to the stock room. Another alternative would be to set up the e- fulfilment centres at the same locations as RDCs. Central Picking & Cross Docking An extension of the e-fulfilment centre model would be to set up a national e- commerce picking centre at a central warehouse. Distribution of the picked orders would then be a two-stage process. Stage one would be to the retailer s stores using the existing store distribution network. Stage two would involve transfer of the picked orders to smaller delivery vehicles for final distribution. Fresh items delivered direct from supplier to the store would be added to the order at the store. The economy of scale to the business could be immense. However, the scale of central warehousing would bring its own logistics problems. 4. DRIVING FORCES FOR GROCERY E-TAILERS 4.1 Service Levels E-commerce consumers require a high level of service in order to convert them from their existing shopping practices, hence the reservations of many retailers to store based picking, which might result in incomplete e-commerce orders. Several retailers using the in-store picking model appear to be using it as a method of testing the market and gaining experience. They are finding that at current levels of demand they are able to provide an acceptable, but not perfect, level of service. However, if demand increases they are likely to change to e-fulfilment centres to ensure the necessary level of customer service. The level of service offered, in terms of delivery time or reduced delivery charge, is likely to be an area in which companies will compete to win e- commerce business in the future. Customers expect to buy goods at the same price through home delivery as they do in store - delivery charges are an obvious barrier.

10 The duration of delivery windows and the period during the day when deliveries are available. An increasing number of evening and weekend delivery slots is expected in all e-commerce sectors. These factors effect transport chain efficiency and profitability. Competition using these service characteristics would, therefore, impact on transport levels and the environment. The importance such service levels to the consumer makes some retailers think that they will never be able to contract out delivery operations. In contrast, other retailers are already co-operating with trusted third party service providers and have contracted out the home delivery element of the operation Profitability & Performance Requirements There is a consensus that the cost per delivery needs to be controlled if e- commerce is to be a success. Remote ordering and home delivery relies on several additional factors compared to store-based shopping. In order of additional cost to the business they are: 1. Assembling orders 2. Delivering orders 3. Getting orders (marketing) 4. Taking orders (receiving s) Compared to traditional remote ordering routes the internet offers a saving but this is the smallest additional cost. Specific factors that impact on the cost per delivery include: The cost of assembling each order Number of deliveries per round Geographic density of deliveries round Vehicle utilisation The greatest cost comes from the labour intensive picking and packing of orders. As for traditional store deliveries, current explicit delivery charges do not cover the actual costs and the shortfall must be made up by profit gained from the purchased goods. 4.3 Delivery Density Retailers want to concentrate the deliveries on each round into a certain area in order to reduce the cost per order. Three of the retailers consulted were running their delivery services in parallel with social service contracts providing grocery supplies to elderly or housebound people. This guarantees a relatively high geographic concentration of delivery drops and a regular core delivery schedule that commercial orders can be added to. The level to which the retailers are willing to modify a customer s requested order time to fit an optimised delivery schedule varied, with newer entrants to

11 the market being more willing to make outlying deliveries in order to gain customers. At the time of the study none of the retailers questioned was planning to vary delivery charges according to pre-assigned delivery schedules, although this remains an option. The development of a shared distribution system for all retailers would increase the density of deliveries - thereby reducing the cost per delivery. However, the introduction of a common distribution service might introduce the need for different IT systems and an extra distribution link between the picking centre and the common distribution centre. Retailers do not see this as beneficial to the flow of goods from them to the consumer. They also see a major benefit in controlling the delivery operation because of marketing opportunities. The use of secure receptacles to receive deliveries at the home when the occupier is absent would allow distributors to leave goods at their destination using a schedule based purely on transport efficiency. For grocery deliveries, such a storage device would need to be temperature controlled, unless the goods were delivered in an insulated box. The use of collective delivery points (CDPs) could offer a more promising option to increase delivery density. Such a facility would offer the option of receiving deliveries at the optimum time for the retailer. The goods could be stored until it was convenient for the customer to collect them or the operator of the CDP could deliver as part of a local delivery round. This would also act as a central facility for the management of any returned goods. The exact facilities required would depend on local circumstances. Examples of possible CDP locations include: Workplaces Local stores or petrol stations Park & Ride sites Out of town shopping centres Local urban delivery centres Leisure facilities Schools Railway Stations A CDP could also provide a link between consumers and other small businesses within a small radius of the centre. The opportunity to order goods from local stores using a shared information terminal would give small retailers an internet presence without requiring individual investment in a full site. The use of local stores as CDPs, especially in rural areas, has been proposed as a method of increasing the number of people accessing the store. This could be of great benefit to the store, as once inside people will often make impulse purchases. The option of collecting goods from a CDP rather than making a journey to a more distant supermarket may not reduce the total number of consumer journeys, but it could reduce the average trip length leading to a reduction in congestion and environmental impacts. Such a service could also be of great benefit to the community in the redevelopment of a local economic and social focus.

12 The use of local stores as collection points has been greeted with some scepticism by the major supermarkets. The supermarket would need to be certain of hygiene standards and working practices. Hence such alliances would need to be strictly monitored. Discussions were held with retailers outside the grocery sector, together with the delivery arm of one of the UK s largest home shopping businesses. These interviews gave a clear insight into the similarities and differences between the grocery sector and other non-food businesses. In addition to carrying items for their core business non-grocery logistics providers do accept contracts to deliver goods for third parties, providing that these contracts do not prevent them from meeting the in house delivery needs. Their feeling was that the volume required by groceries would severely reduce the number of deliveries they could make for their core business per vehicle per day. When combined with the additional cost of equipping either new or existing vehicles with temperature control to carry groceries, the prospect of carrying groceries appeared unattractive and uneconomic. 4.4 Disintermediation: Changing the Logistics Structure The internet provides the opportunity for manufacturers to offer their products direct to the consumer, either individually or in collaboration with noncompeting manufacturers, without using the services of an intermediary. The resulting flows of goods that would be required from disperse manufacturing plants direct to the consumer would necessitate the design of new distribution models (Hawkins). There is no evidence that this is an imminent threat to conventional grocery retail businesses at present (King). This is in part due to the strong market position held by the major UK retailers. However, retailers are aware of the potential threat offered by multinational manufacturers with interests in many different types of products. An efficient e-commerce business could be a good way for retailers to minimise potential competition. 4.5 Communications Ordering Options Computer-based ordering is currently regarded as the preserve of higher socio-economic groups. Hence grocers have been keen to capture a share of this market. The recent introduction of flat rate access charges to the internet reduce the barriers to on-line browsing and ordering systems. Interactive digital television may eventually reach a very wide audience. New idtv customers will have increased confidence due to the use of a familiar technology and the expectation that such services will be easier to operate than current e-commerce options could further open the grocery market to competition (Kurt Salmon Associates). Systems that resemble the traditional compilation of a shopping list are most likely to succeed. The final option could provide a basis for this, but would need to be augmented with the opportunity for additional choices. A voice-

13 activated computer system would allow this type of active ordering while thinking or actually walking their way round the kitchen. Retailers do not currently see access to technology as the major barrier to use of these systems. Current barriers include a lack of awareness due to deliberate under marketing of the service while newer entrants to the market optimise their business systems and the need for people to adjust their lifestyles and attitudes to shopping. Order Tracking Opinions vary about whether customers really want order tracking within the grocery sector. Lead times between order placement and delivery will be somewhere between 12 and 72 hours. Given that customers receive a relatively short delivery window of up to 2 hours it is likely that many customers will merely wait for the goods. Nonetheless the retailers systems allow order tracking for their own purposes. Making this available to the consumer provides added value for customers who want it. Rudimentary tracking services based on fulfilment of orders throughout the day and vans equipped with simple (non-gps) radio devices allow progress to be monitored. Customers can pinpoint the likely timing of their delivery to within 20 minutes. Perhaps greater benefit can be derived from interaction between retailer and consumer with regard to out of stock items or additional items identified by the consumer prior to despatch. 4.6 Size of the Market The retailers interviewed were uncertain about the exact potential of the grocery e-commerce market. Retailers are aware of various studies into the potential market, but do not have full confidence in the evidence produced to date. Instead they all have independent ideas of the future of grocery e- commerce in the UK. General consensus exists among the grocery retailers that e-commerce will not exceed 10% of total UK grocery sales value by 2005, or 15% by 2010, with many of those interviewed thinking that these would be very optimistic predictions. However, retailers recognise that their own operations are still at too early a stage to make concrete predictions about future trends from existing data. Demand Scenarios The consultation paper Clicks and Mortar published by the Retail e- commerce Task Force in March 2000 developed four scenarios as described in section 1. The regular nature of grocery purchases indicates that the upper limit to uptake of grocery e-commerce in these scenarios is the proportion of the adult population using e-commerce frequently.

14 Clearly the grocery retailers expectations are lower than the Clicks and Mortar scenario figures suggest at first glance. However, the scenarios relate to the uptake of e-commerce in all sectors, rather than considering the uptake in a single sector. Clicks and Mortar quotes one of a number of surveys by ICL/MORI which revealed that 28% of the population were interested in online grocery shopping. Combination of this information with recent market research by a major retailer suggests that a 28% level of interest might translate to a 5% level of use. Making firm predictions on such a single projection is of course impossible. However, it could suggest that current industry expectations of e- commerce taking between 2.5 and 10% of the grocery market in 2005 are realistic. Relating current retailers expectations to the Clicks and Mortar scenarios the following levels of uptake for grocery e-tailing could be appropriate: Scenario % of adult population using grocery e- commerce Explosive Dynamic Active Sluggish < 4 Possible reasons why e-commerce uptake in the grocery sector could be lower than in general retailing include: The need to rely on traditional physical distribution systems for the delivery of groceries. Consumer desire to see fresh produce before they buy it. A restricted range of products being available via e-commerce compared to that on display in a supermarket. 5. THE FUTURE: SUMMARY OF FINDINGS AND QUESTIONS UK grocery e-tailers are using two basic logistics models - store-based order picking and e-fulfilment centres. Both models are based on experience gained from investment in their distribution chains and in home delivery. Both logistics models will result in some extra distance being travelled by commercial vehicles. First impressions are that e-fulfilment centres will have the greater impact because the logistics operations diverge from the traditional channels further from the consumer. The overall transportation impact will depend upon the balance between total distance travelled by retailers and the impact that this has upon customer travel behaviour. Three possible variations of the current models have been identified: The creation of e-fulfilment centres at the same location as existing stores. The creation of e-fulfilment centres at the same location as existing RDCs.

15 The creation of a centralised e-fulfilment centre with the picked orders being distributed to existing stores, for onward distribution to the consumer. Currently the greatest market for grocery e-commerce is in London. Hence, the major retailers have concentrated their activities there by offering either a trial or full service, leading to more competition than in the rest of the UK. Several favourable factors apply: High customer density High average income Familiarity with technology Time poor customers Whatever distribution model is in use, retailers recognise the need to control costs. E-commerce operations must compete with store-based shopping on price. The additional costs associated with e-commerce grocery retailing are: New infrastructure costs (delivery vehicles & e-fulfilment centres) The cost of gaining an order (establishing, maintaining and marketing the website) Order processing The cost of picking, packing and assembling an order Delivery cost Digital order placement methods reduce the need for human involvement at the order processing stage and so reduce costs. However, the largest operational cost is that of assembling an order, although it may be possible to develop automated order picking facilities that cut costs at this stage as well. The most effective way to reduce the transport cost per delivery is to concentrate deliveries within a small area. This will in turn reduce the impact that the deliveries have on the transport system and associated environmental factors. However, this reduces the prospect of delivery to rural communities. A tighter density of grocery home deliveries could be brought about by the use of common third party couriers to pool delivery resources and delivery to unattended reception devices. There is resistance to this at the moment for a number of legal, commercial, institutional and social reasons. Retailers do not foresee significant co-operation on deliveries either within the grocery sector or between grocery retailers and existing common distribution, except in particular circumstances of single product, high value, ambient items where a specific contract could be negotiated. The most likely methods of further improvements to the delivery density appear be to deliveries to workplaces and to local stores or other collection points which would increase the proportion of daytime deliveries. The use of local shops in rural areas as collection / distribution points is the most likely way in which widespread provision of e-commerce can be brought to rural areas in the near future.

16 Bibliography Retail e-commerce Task Force. (February 2000) Clicks and Mortar: The New Store Fronts. Investec Henderson Crossthwaite. (February 2000) Food Retailers, can they Deliver?. Department of Health Policy Action Team 13. (1999) Improving Shopping Access for People Living in Deprived Neighbourhoods, Reference: IP 500 (CPL). DETR Energy Efficiency Best Practice Programme. Energy Savings From Integrated Logistics Management, Good Practice Case Study No King, D. (December 1999) The Development of UK Home Food Shopping, Logistics & Transport Focus Hawkins S. (March 2000) Trends in E-distribution, Logistics & Transport Focus Kurt Salmon Associates: The Logistics Factor of the Home Shopping Equation, Institute of Logistics. ACKNOWLEDGEMENTS Discussions with the following organisations in the production of this consultation paper are gratefully acknowledged. Boots the Chemists Budgens Direct Marks and Spencer Safeway Stores J. Sainsbury plc Somerfield - 24/7 Tesco plc Waitrose ZERO (Zero emission distribution A National non-food High Street company) Retailer The distribution arm of a major UK direct retailing business

17 Notes 1 Further examples of home delivery experiences can be found in Delivering Alternatives - Successes and Failures of Home Delivery Services for Food Shopping : A review by Sally Cairns, now at Transport Studies Unit, University College London. 2 The reduction in vehicle kilometres with increasing store / picking centre density was formally demonstrated several years ago for customer access to stores. (J. Sainsbury plc: Superstore Impact on Travel Patterns). 3 The issue of co-operation and forming true business partnerships was the key outcome of the 1999 Institute of Logistics Annual Debate as reported in Logistics & Transport Focus, September 1999.