Growing FMCG brands can find it harder to secure suitable warehouse space in the UK, particularly when they need the right location, capacity and handling capability at the right time.

The issue is not simply the total amount of warehouse space available.

A growing brand needs space that works for the stock being held, the volumes moving through it, the customers being supplied and the way the business expects to grow.

That is becoming more difficult at the higher-quality end of the market. Property consultancy Knight Frank reported that the overall UK logistics vacancy rate was 8.0% at the end of Q2 2026, but Grade A vacancy was considerably lower at 4.4%. 

Most of the increase in available space during the first half of the year came from second-hand properties returning to the market.

For an FMCG brand, the challenge is finding suitable capacity without committing to more space, stock and infrastructure than the business actually needs.

Key Takeaways

• Suitable warehouse space can be harder to secure even when overall UK warehouse availability is increasing.
• Modern Grade A space remains considerably tighter than the headline UK logistics vacancy rate suggests.
• Retailer listings, promotions and production runs can increase warehouse requirements before the additional sales happen.
• Taking too much space or holding too much stock can tie up cash as well as increase warehouse costs.
• Outsourced warehousing can give growing brands access to capacity without requiring them to commit to a complete warehouse operation themselves.

Why Is Suitable UK Warehouse Space Becoming Harder to Find?

Demand is increasingly concentrated on modern, higher-quality warehouse space while new development remains constrained.

Knight Frank reported that Grade A space accounted for 57% of UK logistics take-up during the first half of 2026, compared with an average of 26% over the previous five years.

More second-hand warehouse space has returned to the market, but that does not necessarily mean more suitable space is available in the location, condition or specification a brand requires.

For an FMCG brand, the question is not simply whether warehouse space exists. It is whether the right space is available at a cost and on terms that make sense for the business.

What Should an FMCG Brand Look for When Choosing Warehouse Space?

Having enough square footage does not mean a warehouse can support the operation.

Start with what the business needs the warehouse to do. Where does the stock need to go? How often will orders leave? What volumes need to be held? What happens during a promotion? How quickly does the stock turn?

An FMCG brand should consider:

• available capacity;
• location;
• the number of pallets being held;
• shelf life and stock rotation requirements;
• pallet and case-picking requirements;
• security;
• retailer order profiles;
• transport implications;
• ability to manage promotional or seasonal peaks; and
• flexibility as volumes change.

Location can be particularly important. A warehouse may offer cheaper storage but create additional transport cost or make customer deliveries less practical. Another facility may have enough physical capacity but not suit the handling or order profile the brand requires.

The cheapest available warehouse can therefore become more expensive elsewhere in the operation.

For a growing FMCG brand, suitable warehouse space needs to support both the stock and the way it needs to move.

Why Does FMCG Growth Make Suitable Warehouse Space Harder to Plan?

Because growth rarely creates a smooth increase in warehouse demand.

A new retailer listing can require stock to be produced before the first orders arrive. Promotions can create temporary inventory builds. New SKUs increase the number of products being held, while seasonal demand and production minimums can create short-term peaks.

Warehouse demand can therefore increase before sales do. 

We have seen production dates agreed before warehouse capacity was checked. The production itself may be achievable, but the finished stock still needs somewhere suitable to go when it is released.

Production forecasting and warehouse planning therefore need to work together.

If the forecast shows that more product needs to be manufactured, the business also needs to know when those finished goods will reach the warehouse, whether there is enough suitable capacity to receive them and whether the logistics operation can cope as customer orders increase.

The same applies to a retailer launch. A brand may have the production capacity and customer demand to support the opportunity but still need additional warehouse capacity before the first additional revenue comes through.

Warehouse planning should therefore account for normal stock, incoming production, known promotions and growth that has already been committed.

Should a Growing FMCG Brand Take More Warehouse Space Than It Currently Needs?

Some spare capacity gives a growing brand room to handle increases in stock.

Too much fixed capacity creates another problem: the business pays for warehouse infrastructure that may sit unused outside its busiest periods.

Producing more inventory than the business needs ties up cash as well as warehouse capacity. That becomes particularly important for products with a limited shelf life.

For an early-stage brand, accepting a smaller production run may sometimes mean paying more per unit. But producing a larger quantity simply to improve unit cost can create a bigger cash and storage commitment before the sales exist to support it.

For a founder or Commercial Director, the decision is partly about how much growth the business is prepared to build into its fixed cost base and how much cash it is prepared to tie up in stock.

Taking a large amount of additional space because sales might increase can be expensive.

Waiting until every available pallet position is being used can leave the business trying to find suitable space when it has fewer options.

What Happens When an FMCG Brand Cannot Find Enough Suitable Warehouse Space?

The problem can start affecting the operation before the warehouse is completely full.

Stock may need moving simply to reach other pallets. Overflow storage may be introduced. 

Products can become split between locations. Incoming production can become harder to schedule around stock that is already waiting to leave.

If inventory is spread across several locations, the brand needs to know what is held where, what is available for customer orders and how that stock will reach the customer.

A retailer opportunity becomes harder to support confidently if the business cannot establish where the additional stock will be held or how it will be distributed.

Can Outsourced Warehousing Help When Suitable Space Is Hard to Secure?

It can give a growing FMCG brand another option besides taking dedicated warehouse space itself.

Leasing or operating a warehouse creates a fixed commitment. The business needs sufficient demand to justify the space, people, systems and operating costs required to run it.

Outsourced warehousing allows a brand to use storage and logistics infrastructure that is already operating.

At WFL, we have been supporting brands for nearly 20 years, which has helped us build strong relationships with warehouse partners and the scale to negotiate competitive rates for our clients. This gives our clients access to professional, secure warehouse capacity without requiring the brand to lease and operate its own facility.

But putting stock into a warehouse only solves one part of the requirement. The stock still has to get out again.

As a 4PL, our role does not stop when the stock reaches the warehouse. We can coordinate the warehouse and transport required to move that stock onwards to retailers, including opportunities to consolidate deliveries where that makes operational sense.

Flexible outsourced capacity can be useful when warehouse requirements increase around promotions, retailer launches or seasonal peaks.

Outsourced warehousing is not automatically the right model for every business. A brand with large, stable and predictable volumes may decide that dedicated warehouse capacity makes commercial sense. A growing brand with less predictable requirements may place more value on being able to increase or reduce capacity as its needs change.

The warehouse model needs to fit the volume the business expects to handle and the amount of fixed capacity it can justify.

When Should an FMCG Brand Start Looking for More Warehouse Capacity?

Before a new listing, promotion or production commitment makes the additional space essential.

Waiting until the current warehouse is full reduces the time available to assess suitable locations, costs and operating models.

A growing brand should therefore be looking ahead at:

• current stock;
• incoming production;
• expected customer orders;
• promotional and seasonal peaks;
• committed retailer launches; and
• available warehouse capacity.

That gives the business time to find suitable capacity rather than having to accept whatever option is available when the requirement becomes urgent.

How Should Growing FMCG Brands Respond to a Tighter Market for Suitable Warehouse Space?

Plan capacity before it becomes urgent and separate available warehouse space from suitable warehouse space.

The property market is only one part of the decision. The business also needs warehouse capacity that works with its stock, customers, transport requirements and expected peaks.

The business also needs to decide how much fixed infrastructure and inventory makes sense while volumes are still changing.

For brands that do not want to commit to dedicated warehouse infrastructure, WFL can use our warehouse partner network and coordinate the transport needed to move stock onwards.

If warehouse capacity is starting to restrict retailer growth, promotions or production planning, speak to WFL about securing the right capacity, keeping stock moving and avoiding unnecessary fixed warehouse costs.

FAQs

Why is UK warehouse space getting harder to find?

The difficulty is concentrated in suitable, higher-quality space rather than every type of warehouse. More second-hand space has returned to the market, but modern Grade A availability remains considerably tighter, particularly where businesses need the right location and specification.

Is there a shortage of warehouse space across the whole UK?

No. The issue is not a shortage of every type of warehouse space across the UK. Availability varies by location, quality and specification, so a brand may still struggle to find suitable capacity even when other warehouse space is available.

How much warehouse space does a growing FMCG brand need?

There is no standard amount. It depends on pallet volumes, stock turn, SKU count, production patterns, promotions, seasonal peaks, customer requirements and how much additional capacity may be required as the brand grows.

When should an FMCG brand start looking for additional warehouse space?

Before its current capacity reaches its limit. Upcoming retailer listings, promotions, production runs and seasonal stock builds should be considered early enough for the brand to assess suitable options rather than arranging overflow storage at short notice.

Can an FMCG brand use outsourced warehousing instead of leasing its own space?

Yes. Outsourced warehousing allows a brand to use existing storage and logistics infrastructure rather than taking dedicated warehouse space itself. This can be particularly useful where volumes change around retailer launches, promotions or seasonal demand.