Sainsbury’s plans to cut 3,000 jobs in the UK by closing its hot food counters and cafes and cutting senior management roles by 20% as it struggles with rising labor costs.
Sainsbury’s chief executive Simon Roberts said the job cuts are part of the company’s previously announced plan to cut costs by £1 billion. He stated that the business is in a “particularly challenging cost environment”.
“We’ve had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient,” he added. “The decisions we’re announcing today are necessary to ensure we continue to move forward.”
The job losses come as Britain’s biggest retailers warn they may have to cut thousands of jobs and raise prices this year. Industry is bracing for Labour’s budget measures, which include a £25bn rise in employer national insurance contributions from April and a 6.7 per cent rise in the national minimum wage.
Despite the challenges, most major supermarkets did well over the Christmas period. Sainsbury’s, which also owns Argos and Habitat, recently reported its “biggest Christmas ever”, with sales up 3.8% in the six weeks ending January 4. Sales at its Argos stores also grew by 1.1% over the same period.
Sainsbury’s will close its remaining patisserie, hot food and pizza counters and move the most popular products from these areas to the regular shopping aisles. It will also introduce a “self-service” bread-slicing option.
Sainsbury’s will also close all 61 remaining Sainsbury’s-branded cafes in consultation. The retailer explained that “the majority of Sainsbury’s most loyal shoppers do not use cafes regularly, and specialist partner-run cafes and food halls are becoming increasingly popular.”
The chain, which employs 148,000 people, operates almost 600 supermarkets and more than 800 convenience stores across the UK.
Sainsbury’s is also reorganizing departments at its head office to create “fewer, bigger roles and clearer responsibilities”. The company stated that these changes are aimed at “accelerating decision-making and reducing costs” by cutting senior management roles by 20% in the coming months.
The London-headquartered company said it would seek to relocate affected workers where possible and provide a support package that exceeds statutory requirements for those unable to be employed.
