Tractor Supply Unveils Multi-Year Plan to Revolutionize Last-Mile Delivery

Executive Summary:
Tractor Supply Co. has announced a multi-year initiative to enhance its last-mile delivery operations by transitioning more bulky item deliveries to its in-house network. During a recent investor presentation, EVP and Chief Supply Chain Officer Colin Yankee detailed plans to establish ldquo;hub stores rdquo; that will integrate drivers and inventory from various facilities to streamline deliveries.

Currently, 90% of the company rsquo;s 5 million annual final-mile shipments occur within 40 miles of a Tractor Supply store. The initiative leverages the company rsquo;s extensive store network and mixing centers to create a highly flexible, asset-light delivery model. Deliveries will range from lighter loads to multi-pallet shipments, ensuring a broad capability to meet customer needs.

Key advantages of in-house delivery include significantly lower product return rates mdash;10 times less compared to external carriers mdash;and a 13% increase in customer satisfaction scores. These benefits align with Tractor Supply rsquo;s focus on improving customer experience and operational efficiency.

The rollout will occur in phases:

2025: Establish the final-mile team, implement routing and scheduling technology, and expand test markets.

2026-2027: Scale coverage area and integrate complementary services with third-party providers.

2028-2029: Increase in-house delivery volume, launch premium services, and improve route density to reduce costs.

By the decade rsquo;s end, Tractor Supply aims to handle 90 ndash;95% of large-item deliveries in-house, a significant increase from its current 15% coverage, while reducing reliance on external carriers like FedEx, UPS, and Roadie.