Magazine Luiza began operating at the end of the year the largest distribution center in the network, in Guarulhos (SP). With 100,000 square meters, it began to be planned about three years ago to meet the company’s increased demand. With this and other units opened in 2021, Magalu’s storage capacity grew by 30% in the year. The company arrives in December with 21 CDs and 1 million m² of storage area. Considering the stores, by 2023 the company expects to have 2 million m² in total.
The opening comes at the end of a year considered particularly difficult for retailers. After a strong growth in digital sales in 2020, the performance in 2021 was marked by the end of the impact of emergency aid, by high inflation and by the continuation of bad indicators of employment and income. The trading of shares of these companies on the Stock Exchange mirrored these problems. Magalu closed the year with the worst performance on the Ibovespa, the main indicator of B3, with a drop of 71%.
Investment in storage in Guarulhos looks ahead. Built to give the company a break, the Guarulhos DC currently uses around 40% of its storage capacity and 15% of its shipping capacity. From there, between 8 thousand and 12 thousand orders are sent per day.
With the great expectations for the second half of 2021 frustrated by inflation and unemployment, Magalu saw its stocks increase from 70 to 100 days, according to a recent balance sheet. This setback caused the company to increase provisions – money earmarked for possible losses.
OFFERS
The retailer bets on Liquidação Fantástica, the traditional Magazine Luiza event, which used to gather lines of customers at its doors until the pandemic. “We have an alignment with the commercial area that balances this inventory,” says Magazine Luiza’s logistics director, Marcio Chamas. “Last quarter sales have been planned for level equalization in our inventory, and we have high expectations for the Fantastic Sale, which has always yielded great results.” The event will take place on the next 7th.
With 450 permanent employees and about 150 temporary workers to meet the end-of-the-year demand, the DC operates with 600 permanent workers. The space began to be stocked in September and went into operation in November.
While images of hyper-tech CDs from digital commerce companies appear around the world, Magalu’s new space is more analog. Unlike its logistics hub in Louveira (SP), with automatic conveyor belts to help move products, the main attribute of the new facility is its storage capacity.
If in Louveira the premise is speed for lighter items purchased over the internet, Guarulhos is aimed at serving 166 physical stores in the State of São Paulo and will handle 950,000 products per month when it is 100% operational.
LOGISTICS EXPANSION
For Alberto Serrentino, a partner at consulting firm Varese Retail, investments at this level in a company are decisions made based on the long term. “The company is growing and the demand in the marketplace is growing,” he says.
According to Serrentino, the Brazilian e-commerce race is necessarily going through logistical expansion and all competitors are making similar moves. Information is from the newspaper The State of São Paulo.
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