Sainsbury’s to cut 3,500 roles as part of business restructure

Sainsbury’s has announced it will cut 3,500 jobs as part of plans to restructure its business in light of changing customer behaviours. These roles will be across its in-store meat, fish and deli counters, which are closing as a result of reduced customer demand, and from the closure of around 420 stand-alone Argos shops by 2024, reducing this store estate to about 100.

This announcement has come on the day that England has entered a new one-month national lockdown, with the supermarket acknowledging that “Covid-19 has accelerated a number of shifts in our industry.”

This includes the shift to online shopping, and in a trading update for the 28 weeks ended 19 September 2020, Sainsbury’s revealed that eCommerce revenue rose by 117% to £5.8 billion, representing 40% of total sales. This compares to around 19% in the previous year.

The retailer therefore expressed plans to continue to “profitably grow groceries online sales to meet further demand.” It has already ramped up its online delivery capacity throughout the crisis through a range of measures, including the launch of a new on-demand delivery service in partnership with Deliveroo.

Sainsbury’s also reported a pre-tax loss of £137 million during the half-year period, which it attributes to £438 million of one off costs associated with Argos store closures and “other strategic and market changes.” This is despite total retail sales increasing by 7.1%, with grocery and general merchandise revenue up by 8.2% and 7.4%, respectively.

Simon Roberts, Chief Executive at Sainsbury’s, commented: “Covid-19 has accelerated a number of shifts in our industry. Investments over recent years in digital and technology have laid the foundations for us to flex and adapt quickly as customers needed to shop differently. Around 19% of our sales were digital this time last year and nearly 40% of our sales are digital today.

“While we are working hard to help feed the nation through the pandemic, we have also spent time thinking about how we deliver for our customers and our shareholders over the longer term.”

He added: “We are talking to colleagues today about where the changes we are announcing in Argos standalone stores and food counters impact their roles. We will work really hard to find alternative roles for as many of these colleagues as possible and expect to be able to offer alternative roles for the majority of impacted colleagues.”