(Mississauga, ON) November 10, 2009 – Sobeys Inc. today showcased its new automated grocery distribution centre, featuring ‘first-in-Canada’ technology and capabilities designed to increase efficiency and improve customer service.

The new Vaughan, Ontario distribution centre incorporates an automated picking and assembly system for improved product selection accuracy, optimal individual store order assembly and improved delivery to Sobeys Ontario retail store network.

This major investment reflects Sobeys’ commitment to intelligently invest and innovate, providing optimal store and customer service at the lowest possible cost.

“The Vaughan distribution centre is an industry first in Canada,” said Bill McEwan, president and chief executive officer, Sobeys Inc.  “It’s exciting for us demonstrate to our stores, our wholesale customers, our suppliers, our employees and our shareholders that we have truly set the new standard for the most effective and efficient means of distribution in our industry.”

McEwan added that while there are significant cost savings resulting from the leading-edge logistics technology, the greater benefit will be realized by customers at store level as previously less productive employee time is redeployed to further improve the quality and consistency of in-store service.

Automation In Action

The automation process begins as products are received at the distribution centre and checked-in to inventory. From this point automation takes over as products are sorted case-by-case and temporarily stored. Store orders are then received and processed.  As products are selected, each store’s individual order is assembled, again case-by-case, in the optimal sequence according to the actual physical design layout of that particular store, facilitating faster and more efficient shelf stocking.

The size of eight football fields and more than half a million square feet, with a ceiling height of 65 feet, the Vaughan facility  services Sobeys Ontario’s network of 343 stores including Sobeys, Foodland, IGA and Price Chopper. It features 30 receiving bays and 41 shipping bays, making it the largest facility in the Sobeys Inc. distribution network. With the ability to handle 320,000 cases per day, the Vaughan facility offers triple the capacity of a conventional grocery distribution centre.

“The Vaughan Retail Support Centre represents the future of our food retail logistics and underscores Sobeys’ focus on building and sustaining a healthy retail food business and supporting infrastructure for the long term.” McEwan said. “As we continue to become widely recognized as the best food retailer in the country, this facility positions Sobeys Ontario with capacity for growth and service leadership for years to come.”

Several environmental applications have been incorporated into the building design of the Vaughan RSC including a white or “cool” roof made of recyclable material to reduce solar heat transfer and lower electricity demand. In addition, recyclable materials have been used in the foundation of the building and water and hydro conservation features are employed through out the site.

Experts in responsible business and operations management have praised Sobeys commitment to the groundbreaking new facility.

“This facility represents a giant leap forward in terms of technology and I am happy to see Sobeys taking a leadership role in this very important area,” said Markus Biehl, Associate Professor, Operations Management and Information Systems and Director, International MBA Program at York University’s Schulich School of Business. “This will have significant benefits for customer service. It’s very exciting.”

For more information and to arrange site visits or interviews, please contact:

Tracy Chisholm
Director, Communications
Sobeys Ontario
905 671 5308
Tracy.Chisholm@sobeys.com

Backgrounder

Vaughan Distribution Centre

In July 2009, Sobeys opened a new automated dry goods retail support centre in Vaughan, Ontario. The first of its kind in Canada, the Vaughan Distribution Centre is an automated warehouse in which the receiving, picking and shipping process is entirely computer directed and controlled for near perfect accuracy.

The Vaughan facility represents the future of food retailing and underscores Sobeys’ focus on building and sustaining a healthy food retailing business for the long term. With people being the cornerstone to Sobeys’ ongoing growth and success, this new state of the art technology will support their commitment to serving our customers.

Fast Facts:

• Construction of the Vaughan Distribution Centre began in 2007 and was completed October 2008. It took just over a year to then install and test the automation technology before becoming operational in July 2009.
• The Vaughan facility is centrally located just north of Toronto to best service a majority of Sobeys Ontario’s network of Sobeys, Foodland, IGA and Price Chopper stores.
• With 65’ ceilings, over 500,000 square feet of warehousing space, and 30 receiving bays and 41 shipping bays, Vaughan is the largest warehouse in the Sobeys Inc. distribution network.
• The facility has the capacity to receive 320,000 cases per day - triple the receiving capability of any other distribution centre in the Sobeys network – and can ship 200,000 cases a day.
• Vaughan employs 160 people and operates 20 hours a day 7 days a week.
• Vaughan uses utilizes WITRON Logistik Corp. automated warehouse and picking technology to enable optimal store delivery and service at the lowest possible cost.
• This leap forward in grocery distribution accrues benefits to Sobeys, our vendor partners and our customers including:
  • Near perfect order accuracy to ensure a strong in-stock position so we can best provide our customers with the selection of products they need;
  • Bringing more Direct-Store-Delivery (DSD) volume in-house will mean fewer trucks at our back doors waiting to be unloaded meaning more staff serving customers; and
  • Perfectly constructed pallets automatically assembled by individual store layouts reducing product damage and labour at store
• The construction and design has incorporated environmentally sensitive features including:
  • Recycled iron and steel slag in the concrete;
  • A white or “cool” roof made of recyclable materials to reduce heat transfer into the building and reduce electrical heating demand;
  • Fast charge battery charging units that use less energy than conventional battery charging equipment;
  • Water conservation features including electronic water faucets; and
  • Self-cleaning windows that provide natural light, reducing the facility’s need for artificial lighting.