Norway. Coop Norge SA

NIB has provided the loan to finance the expansion of Coop Logistikksenter Gardermoen (CLog 2.0), located near Oslo Airport, and the construction of a new non-food distribution centre in Langhus, south of Oslo.

The existing grocery logistics centre has reached its maximum capacity and Coop will expand the current size, 52,000 m², by 33,000 m². After the expansion, CLog 2.0 will be the largest and most modern logistics centre in Norway. Coop Norge will invest approximately NOK 750 million in the CLog 2.0 project.

Coop is also constructing a new distribution centre in Langhus, south of Oslo. The logistics centre is expected to be operational by early 2021. Coop wants to become more cost-efficient in its rapidly growing retail and e-commerce sales within the non-food segments such as building materials, sports, electronics, and home products.

Coop Norge will invest approximately NOK 500 million in the project.

Coop is owned by 1,8 million co-owners, and is Norway’s second largest grocery retailer, managing more than 1200 grocery stores in 6 different formats: Obs, Extra, Coop Mega, Coop Prix, Marked and Matkroken. In addition Coop operates approximately 120 DIY stores; Obs BYGG and Coop Byggmix. Coop Norge SA manages procurement, assortment, chain management, marketing and logistics on behalf of 70 local cooperatives.

Productivity
The expansion of CLog 2.0 and the centralisation of operations will increase the capacity of Coop’s logistics operations by almost 40%. The largest cost savings will come from a reduction in labour inputs used in the other logistics centres.

The automation and extension to the warehouse in Langhus will provide Coop with significant savings in operational costs due to technical progress and centralisation in the logistics of non-food products. As is usual when retailers invest in fully automated logistics facilities, the main savings in operational costs emerge from reductions in staffing. In Langhus, COOP expects to employ 69 (31%) fewer workers than it does in its current manual facility.

Expect productivity impact:

• Project cost: NOK 1 250 million (CLog: NOK 750 million; Langhus NOK 500 million)
• Staff estimate in CLog (Langhus) in 2023: 525 (150) full-time equivalents (FTE)
• Estimate of total staff in COOP grocery logistics in 2022: 944 FTE

Environment
Key environmental issues related to logistics are impacts from transport (traffic emissions). Greenhouse gas emissions related to transports constitute more than 90 % of the carbon footprint of logistics. In this project, however, no significant changes in terms of transport are expected.

No environmental concerns identified.