Sainsbury’s is set to cut 3,000 jobs in the UK by closing its hot food counters and cafés and reducing senior management roles by 20%, as it grapples with rising labour costs.
Simon Roberts, chief executive of Sainsbury’s, said that the job cuts are part of the company’s previously announced plan to reduce costs by £1 billion. He stated that the business is “facing into a particularly challenging cost environment.”
“We have 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 and effective,” he added. “The decisions we are announcing today are essential to ensure we continue to drive forward our momentum.”
The job losses follow warnings from Britain’s largest retailers that they may be forced to cut thousands of jobs and increase prices this year. The industry is preparing for Labour’s budget measures, which include a £25 billion rise in employer National Insurance Contributions from April and a 6.7% increase in the National Minimum Wage.
Despite the challenges, most major supermarkets performed well over Christmas. Sainsbury’s, which also owns Argos and Habitat, recently reported its “biggest ever Christmas,” with sales up 3.8% in the six weeks to 4 January. Sales at its Argos stores also increased by 1.1% during the same period.
Sainsbury’s will close its remaining patisserie, hot food, and pizza counters, reallocating the most popular items from these areas to regular shopping aisles. It will also introduce a “self-serve” bread slicing option.
Sainsbury’s will also close all 61 remaining Sainsbury’s-branded cafés, subject to consultation. The retailer explained that “the majority of Sainsbury’s most loyal shoppers do not use the cafés regularly, and cafés and food halls operated by specialist partners are becoming increasingly popular.”
The chain, which employs 148,000 people, operates nearly 600 supermarkets and over 800 convenience stores across the UK.
Sainsbury’s is also reorganising its head office departments to create “fewer, bigger roles with clearer accountabilities.” The company stated that these changes aim to “drive faster decision-making and bring costs down” by cutting the number of senior management roles by 20% over the coming months.
The London-headquartered company stated that it would aim to redeploy affected workers where possible and provide a support package that exceeds statutory requirements for those unable to be retained.