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Marks & Spencer (M&S) has reversed its plan to develop its third DC at DP World London Gateway, as it looks to find a more cost-efficient way of delivering its upgraded distribution network instead.

The retailer said last year that it would develop a 900,000ft² site at the container port for its general merchandise business, which includes clothing and homeware.

But in its annual results earlier this week, M&S said it was no longer going to proceed with the development of the DC, which was scheduled to open next year.  Instead it intends to convert four of its regional DCs into NDCs, which will operate alongside its two existing NDCs in Castle Donington and Bradford.

A spokesman for M&S could not disclose the locations of the four sites earmarked for development and would not comment on the work likely to be carried out. He said: “Our strategy hasn’t changed and we remain on track to deliver a new, national network of clothing and home distribution centres by 2016/17.

“We can deliver this in a more capital efficient way without a third, large automated distribution centre and therefore we are not proceeding with the acquisition of the London Gateway site. We continue to ship goods through the London Gateway port and won’t completely rule out a presence there in the future.”

M&S embarked on its supply chain transformation programme in 2009 with the intention of creating a more flexible and cost-efficient network. It intended to move away from operating 110 small warehouses to a network of fewer, larger depots. It currently has around 50 sites nationwide.

A spokesman for DP World London Gateway said:  “We continue to be a port of choice for M&S and we will keep moving forward with them to support their business development objectives and reduce their supply costs.”

In its results, M&S also revealed that 90% of its e-commerce orders now pass through its Castle Donington DC, which opened last year.

Prologis recently revealed plans to develop a 316,000ft² DC at London Gateway.

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