Distribution centre likely to serve area beyond south Island, says retail analyst

A large distribution centre proposed for Victoria International Airport lands would likely serve all of Vancouver Island, says a Vancouver retail analyst.

Edmonton’s York Realty wants to construct a 486,937-square-foot building on 7.7 acres and lease it to one tenant. No name has been released yet.

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David Ian Gray, founder of DIG360 Consulting, said Thursday that companies like Amazon and Walmart come to mind, although the tenant might also be a third party, a logistics company working on behalf of many other brands and retailers.

The project, with a warehouse and parkade, would be at McDonald Park and Galaran roads on federal land held by the Victoria Airport Authority. Because the property is federal, the airport authority — not the municipality of Sidney — will decide whether to approve the plan.

Concerns expressed at Sidney council this week include traffic, building height and light pollution. The town is interested in hearing from area residents prior to its May 10 meeting, when it will look at the proposal again. Sidney is sending comments to the airport authority on May 11.

The 75-foot-tall York Realty building, with a construction cost of $50 million, would be considerably larger than a recently announced Walmart distribution centre in Moncton, N.B. at 220,990 square feet. That facility is set to open next year to deliver fresh and frozen groceries to 43 company stores in Atlantic Canada.

Given the size of the Sidney project, Gray said, “I would assume [it] would be for the whole island.”

A big shift is going on in the retail sector, focused on supply chains, he said. Consumers are increasingly obtaining products from a mix of sources, including online sites, and brick and mortar stores. They want online orders filled accurately and delivered to their homes or a nearby store for pickup, he said.

There’s a growing realization within the retail world that ­supply chains are integral to customer service, he said.

Another component of the changing face of retail is what is called the reverse supply chain. “A massive volume of product that gets bought online gets returned,” Gray said. For example, a consumer may buy three pieces of one item of clothing in order to find one that fits, then send the others back to the ­supplier.

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