John Lewis signs deal with Tesco for warehouse space in online sales push

The John Lewis Partnership has signed a deal with Tesco to lease a million square foot distribution centre to meet demand for online orders, creating 500 jobs in the process.

The agreement with the supermarket for the site, at Fenny Lock in Milton Keynes, will run for 11 years and will help the department store’s push away from stores and into web sales, which jumped from 40% to 60% of sales during the pandemic.

As a result of the shift away from store sales, John Lewis has announced a series of closures and management shake-ups, affecting around 3,700 jobs across its stores and Waitrose supermarkets.

A John Lewis store
John Lewis has announced several store closures as a result of the pandemic and shifts to online shopping (Steve Parsons/PA)

Andrew Murphy, partner and executive director of operations at the employee-owned retailer, said: “This one-of-a-kind distribution centre represents a fantastic opportunity to power the continued growth of, ensuring that we can keep pace with customer demand – both for our products and for our wide range of fulfilment and delivery options.

“We will invest in the site’s automation capability to support future growth and, over the next two years, we will recruit 500 new partners to work at the distribution centre, which we plan to start operating during summer 2022.

“We will use the Fenny Lock site to fulfil customer orders for fashion, small home furnishing items and technology products.”

The site is four miles from the retailer’s largest distribution hub, which is two million square feet.

Mr Murphy said: “The proximity to our Magna Park campus will enable us to combine more customer orders, reducing both the number of packages we create by approximately one million per year, and the number of lorries on the road, helping us to meet our target of being net zero carbon by 2035.”

The company has committed to a £50 million investment in its website and mobile app, with a further £100 million due to be spent over five years for online growth.

A three-year lease agreement for a 300,000 square foot distribution centre at Bardon, Leicestershire, with Clipper Logistics will be used later this month in preparation for Black Friday.