El Corte Inglés keen to create logistics subsidiary to compete with Amazon

Spanish department store group El Corte Inglés is setting up a new, separate subsidiary specialising in logistics, to compete with Amazon. The goal is to make the group’s transportation infrastructure available to third parties, aiming to generate a revenue of €1.2 billion via El Corte Inglés’s logistics subsidiary - three times the current value - according to information revealed to Europa Press by sources within the group, which is currently led by Marta Álvarez.

El Corte Inglés wants to exploit the transportation and logistics infrastructure it has already in place, through which it supplies its own shopping malls and supermarkets.

According to information published last week by Spanish newspaper El País, the group's logistics organisation currently employs 5,000 people and operates a storage area of 1.2 million m2, between 50 central and local warehouses and the facilities of its branches in Spain and Portugal. Every day, these locations are served by a fleet of 1,000 trucks, in addition to other vehicles used for in-store and home deliveries.

The value of these logistics operations, according to informed sources cited by El País, is estimated at €400 million, the sum El Corte Inglés would have to pay for the same services to an external partner.

Setting up a new logistics subsidiary will allow El Corte Inglés to tap its existing logistics and transportation organisation, and to bolster it via partnerships with other specialised operators. The new organisation will then be made available to third parties requiring an integrated logistics specialist, able to guarantee transportation from production sites to the homes of end-consumers, where necessary.

El Corte Inglés is currently focusing on accelerating its digitalisation, and its online sales have increased by a factor of three in H1 of the 2020 financial year. E-sales currently account for 15% of the group’s total retail sales, as opposed to 7% last year, and their growth shows no signs of stopping: in Q2, in parallel with the post-lockdown reopening of stores, the group’s e-sales rose by 124%, and by as much as 218% in June.