Home Depot’s acquisition of XPO not good for everyone

Amidst speculation that US home improvement giant Home Depot is about to buy out XPO Logistics, ParcelHero has warned that this could be bad for UK businesses.

In a statement, ParcelHero’s Head of Consumer Research David Jinks said: “Speculation was rife just before Christmas that Home Depot – the American equivalent of B&Q – was considering buying XPO Logistics – in part just to ensure that Amazon doesn’t snap it up first!

“Some retail analysts believe Home Depot’s mooted XPO take-over would actually help it become an Amazon in its own right; controlling not just the sales but the means of delivery of a huge range of items.”

ParcelHero believe that the acquisition would be a mistake for Home Depot as well as XPO. XPO’s customers would suffer from the buy-out.

“Home Depot is presumably mostly after the final mile/home delivery side of XPO, which is probably only around 6% of what the logistics giant does. Equally XPO probably only gains around 5% of its overall income from Home Depot – so there is precious little synergy,” said Jinks.

“Most importantly, XPO is a logistic provider for many of the UK’s major brands. It runs UK supply chain operations for companies from Ford to B&Q to Iceland. Three years ago US-based XPO took over the huge European logistics company Norbert Dentressangle – which in its turn had previously absorbed two British transport giants, Christian Salvesen and TDG. The company is so integrated into many British retailers’ and manufacturers’ operations that it has become what’s known as a ‘4PL’ – running fourth-party logistics and supply chain services for many of its business customers: from handling their returns and refurbishing products to operating their customer-help lines!”

Jinks continued: “This enormous supply-chain knowledge is likely to be undervalued by Home Depot – which would consider the take over very much in the light of domestic US furniture and DIY deliveries. This is a flawed idea and it’s to be hoped it was nothing more than the result of pre-Christmas excitement!”