Sainsbury’s has revealed plans to put 3,000 jobs at risk by cutting most of its cafes and hot food counters and reducing management roles by a fifth.
Simon Roberts, the chief executive of the supermarket group, said the job cuts were part of its previously announced efforts to slash £1bn from costs as the business was “facing into a particularly challenging cost environment”.
His comments came soon after the supermarket announced a successful, record-breaking Christmas in terms of sales and market share.
He said: “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. The decisions we are announcing today are essential to ensure we continue to drive forward our momentum.”
The supermarket said the move was a bid to save money ahead of the leap in costs from budget tax measures. In April, employers’ national insurance rates will increase from 13.8% to 15% and NI thresholds will change. It is thought the rise will cost Sainsbury’s about £140m.
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Roberts’ announcement came despite Sainsbury’s decision, announced 10 days ago, to award significant pay rises to store workers.
Sainsbury’s management cull is the result of reorganising departments at its head office to create “fewer, bigger roles with clearer accountabilities”. It said the changes would “drive faster decision-making and bring costs down”.
All the job cuts would be subject to consultation, said the supermarket. It added that “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 company said it would aim to redeploy workers where possible and offer a support package to those affected that exceeds statutory requirements.
Three years ago Sainsbury’s closed 200 in-store cafes and 34 hot food counters putting 2,000 jobs at risk.
Last week, Sainsbury’s hailed its “biggest Christmas ever” reporting a 2.7% rise in total retail sales for the third quarter, covering the 16 weeks to 4 January 2025.
Sainsbury’s sales rose by 3.7% in the quarter and by 3.8% for the Christmas period (six weeks to 4 January).
The chain, which employs 148,000 people, has almost 600 supermarkets and more than 800 convenience stores.
Jane Hallas, head of team at WorkNest, said there was not a significant swing towards redundancy taking place in the UK: “We are beginning to see a slight increase in redundancy queries across most sectors, with some employers planning on making changes ahead of the changes to national minimum wage and employers’ national insurance rates in April.
“However, it is worth noting that the redundancy rate in the UK is still below 5%, with the latest ONS figures show 3.8 per 1,000 employees for the period September to November 2024 and provisional data for December shows an estimated 0.2% decrease for payrolled employees. This compares favourably with the ONS figure of 14.3 per 1,000 employees between September and November 2020. We are anticipating that this trend will continue in the short to medium term.”
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