First Costco, now Coles.

The supermarket giant has confirmed plans to construct a new automated ambient distribution centre in Ipswich, likely to create hundreds of new jobs.

Coles Group Limited made a major announcement to the Australian Stock Exchange about a $950 million project involving two mega distribution centres at Ipswich and Western Sydney.

The company confirmed the new centre, to be based at Redbank, will create hundreds of jobs over an initial 20-year lease period.

It has yet to go through the formal development application process with Ipswich City Council.

Coles CEO Steven Cain said the contracts with WITRON Australia Pty Ltd are subject to the satisfaction of certain property-related conditions and development approvals.

“With the signing of these important contracts, Coles is one step closer to implementing a key element of its supply chain modernisation strategy,” he said.

“This will provide a safer working environment for our team members, lower supply chain costs, enhance our overall business competitiveness and make life easier for our customers by having the right offer in the right location.”

Mr Cain said Coles will spend $950 million over six years on the two distribution centres. Some existing distribution centres will be closed over the next five years as Coles modernises its plant in Redbank.

The competition will certainly hot up between Coles, Costco and other supermarket retailers in the region.

Costco was due to open its doors at its new Bundamba location before Christmas, but delays on road works meant an early 2019 opening.

The warehouse and adjacent petrol station will create about 280 new jobs and will mean huge saving for customers and motorists.

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