Sainsbury’s is to cut 3,000 jobs in the UK through the closure of its hot food counters and cafes and by reducing senior management roles by a fifth, amid rising labour costs.
Simon Roberts, the chief executive of the supermarket group, said he was making the job cuts as part of its already announced efforts to slash £1bn from costs as the business was “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 job losses come after Britain’s largest retailers warned they could be forced to cut thousands of jobs and raise prices this year as the industry braces for measures in Labour’s budget to increase employer national insurance contributions by £25bn from April and raise the national minimum wage by 6.7%.
After the announcement by Sainsbury’s, a Downing Street spokesperson stressed that “difficult decisions” in the budget would help pave the way for economic growth.
Asked how the government would respond to suggestions that lay-offs at the supermarket were influenced by the budget, the prime minister’s official spokesperson said: “Growing the economy, backing businesses, putting more money in people’s pockets are obviously the priority.
“It is only by growing the economy we can fund our public services and raise living standards.”
Sainsbury’s will close remaining patisserie, hot food and pizza counters, shifting the most popular items from there into regular shopping aisles and offering “self-serve” bread slicing.
It will also close all 61 remaining Sainsbury’s branded cafes, subject to consultation, as it said “the majority of Sainsbury’s most loyal shoppers do not use the cafes regularly and cafes and food halls run by specialist partners are becoming more and more popular.”
The chain, which employs 148,000 people, has almost 600 supermarkets and more than 800 convenience stores. About 20% of senior management roles will be cut.
Most big supermarkets traded well over Christmas. Sainsbury’s, which also owns Argos and Habitat, said earlier this month that it enjoyed its “biggest ever Christmas” with sales up by 3.8% in the six weeks to 4 January, while sales at its Argos stores rose 1.1% in that period.
However, the UK grocery industry trade body IGD said on Thursday that supermarket sales had fallen, if inflation was excluded, and it was “hard to envisage sustained strong growth in the UK economy or in household prosperity over 2025.”
It also increased its prediction for grocery price inflation to as much as 4.9% in 2025, from its previous estimate of 4% put out only last month amid wage rises and the continued cost increases on some commodities, such as cocoa.
Sainsbury’s is also reorganising office departments to create “fewer, bigger roles with clearer accountabilities”. It said the changes would “drive faster decision-making and bring costs down” by reducing the number of senior management roles by a fifth over the next few months. Jobs are expected to go at its offices in London and Milton Keynes.
after newsletter promotion
“The decisions we are announcing today are essential to ensure we continue to drive forward our momentum,” Roberts said.
The latest closures come nearly three years after Sainsbury’s closed 200 in-store cafes and 34 hot food counters as part of a shake-up that put 2,000 jobs at risk.
The company, said it would aim to redeploy workers where possible and offer a support package to those affected that exceeds statutory requirements.
Clive Black, a retail analyst at Sainsbury’s broker Shore Capital, said the chain had taken an “increasingly necessary step” of reducing its workforce by about 2% in the light of changes to tax and regulation that will start to be implemented from April.
Holding his profit expectations for the group – at £740m – Black said: “Whilst very difficult, such steps are necessary to us, especially in the face of very considerable UK government-sourced cost expansion.”
Sainsbury’s cafes to close
Leicester – Fosse Park
Pontypridd
Littlehampton – Rustington
Scarborough
Penzance
Denton
Wrexham
Norwich – Longwater
Ely
Pontllanfraith
Bristol – Emersons Green
Nantwich
Exeter – Pinhoe Road
Northfleet – Pepper Hill
Solihull – Marshall Lake
Rhyl
Lincoln
Bridgemead
Larkfield
Whitchurch – Bargates
Hastings – Sedlescombe Road
Barnstaple
Dewsbury
King’s Lynn – Hardwick
Truro
Ipswich – Warren Heath
Godalming
Hereford
Chichester
Bognor Regis
Newport
Poole – Talbot Heath
Rugby
Cannock
Leek
Bristol – Winterstoke Road
Stockport – Hazel Grove
Morecambe
Darlington
York – Monks Cross
Plymouth – Marsh Mills
Chelmsford – Springfield
Durham
Preston – Bamber Bridge
Northampton – Weedon Road
Gillingham – Hempstead Valley
Southampton – Hedge End
Bury St Edmunds
Thanet – Westwood Cross
Colchester – Stanway
Bournemouth – Castlepoint
Isle of Wight
Keighley
Swadlincote
Leicester North
Wakefield – Marsh Way
Torquay
Waterlooville
Macclesfield
Harrogate
Cheadle
