CHICAGO -- The Independent Grocers Alliance here began using a central distribution warehouse to replenish its seven new stores in South Africa to cut shrink and inefficiencies related to multiple back-door deliveries.
Through a partnership with Metcash Trading Ltd., Johannesburg, South Africa, IGA is changing its distribution system in South Africa by implementing one main warehouse to supply products to all seven new IGA stores. The project began in November.
"An average supermarket in South Africa can receive up to 30 deliveries a day," said Kevin Burkum, director of communications for IGA. "By using a centrally located warehouse, stores have access to products from all manufacturers at once, and thus require only one or two deliveries daily."
By using the warehouse for replenishment, the stores will have access to 5,500 items, a competitive number of products for supermarkets in South Africa, according to Burkum.
"Whether receiving multiple deliveries in Peoria or in South Africa, opening the back door multiple times can hurt in terms of shrinkage," he said. "The less we open the back door the better."
Though no definite plans are set, IGA hopes to look into importing and exporting products through the Johannesburg center in the future. Currently, the depot is buying products regionally from manufacturers to distribute to the independent retailers.