The Supply Chain Matters blog highlights another example of a specialty retailer directly acquiring direct logistics services to enhance customer fulfillment
In a Supply Chain Matters commentary published in November 2021, we highlighted developments indicating that some large online and brick and mortar retailers were taking more direct control of online and in-store physical warehouse facilities as well as inventory management.
The cited motivations are large retailers having record levels of cash, and by acquiring owned fulfillment or distribution centers, retailers aim to garner more direct control of the fulfillment experience undertaken by customers. In addition, making an investment in a hot and growing real-estate sector is a reported attractive use of cash.
A further trend was the outright acquisition of third-party logistics providers supporting specialty retailer fulfillment needs. An example was apparel retailer American Eagle Outfitters acquisition of online logistics services provider Quiet Logistics in 2021 in a $350 million cash deal. The retailer was a customer of Quiet Logistics, among other retailers and firms.
We further echoed that trend in our Ferrari Consulting and Research Group’s 2022 Predictions for industry and Global Supply Chains (Available for complimentary downloading in our site’s Research Center) in the area of retail industry directions in the coming year.
Newest Development
The newest development came last week with an announcement from consumer warehouse club retailer BJ’s Wholesale Club’s announcement of its intent to acquire four specialty distribution centers and trucking fleets tied to Burris Logistics, a specialist temperature and fresh food logistics services provider.
The deal, which is expected to close by the second quarter of this year, was described as part of a strategy to expand and better scale more efficient supply chain capabilities.
Burris has reportedly been providing wholesale goods distribution services to Westborough, Massachusetts based BJ’s Wholesale for more than 20 years. The warehouse club retailer has interest in facilities and trucking resources located in the states of Connecticut, Florida, Kentucky and Maryland.
Terms and financial conditions were not disclosed, and the warehouse club company declined to comment further because of being in a quiet period before financial performance disclosure.
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