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Supermarket Sainsbury’s puts “thousands of jobs” at risk in restructure

PUBLISHED: 12:12 23 January 2018 | UPDATED: 16:47 23 January 2018

Sainsbury's supermarket, in Hunstanton. Picture: Chris Bishop

Sainsbury's supermarket, in Hunstanton. Picture: Chris Bishop

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Sainsbury’s has revealed it is to cut thousands of jobs, just a day after rival Tesco announced 1,700 management roles were to be axed in a restructure.

Despite reporting a record Christmas season the supermarket giant, a member of the so-called “big four”, has said it is to cut store management roles with the jobs being replaced by “better paid” new roles.

READ: Tesco to cut 1,700 line manager jobs

The group said workers have the choice of either applying for the new roles, taking more junior positions, or face redundancy.

Sainsbury’s retail and operations director Simon Roberts, said: “The proposals will introduce a more efficient and effective structure, designed to meet the challenges of today’s retail environment. They will deliver cost savings to be invested in our customer offer and in our colleagues as they continue to provide the very best service for our customers.

“Our intention is not to reduce overall headcount as a result of these proposals.

“I appreciate this will be a difficult time for those affected and we will fully support our people through these changes.”

Sainsbury’s enjoyed a strong festive period with grocery sales rising 2.3% and convenience sales leaping 8.3%.

Tesco announced on Monday 1,700 line manager jobs were to be removed from stores but 900 positions with a broader remit would be created.

Analysis by business writer Doug Faulkner

The latest job cuts announced by one of the “big four”, Sainsbury’s, follows closely on the heels of that of rival Tesco.

Both are shaking up their management structures, both made cuts in 2017 and both have made acquisitions in recent times – Tesco buying wholesaler Booker while Sainsbury’s bought Argos.

Naturally there will be some efficiencies to be made when integrating new businesses into a group – that is part of the reason for making a purchase – however there are also other factors at play.

Food prices and inflation have risen sharply over the past 18 months, while online sales continue to grow and discount rivals Lidl and Aldi march on to greater successes and market share.

While both Tesco and Sainsbury’s emerged from Christmas with positive sales, 1.9% and 2.3% up on like-for-like sales for the festive period, it was the discounters that really made waves.

The rise of convenience shopping is another part of the picture: Sainsbury’s saw convenience sales surge 7.3% and online grocery sales leap 8.2% over the festive season.

The increasing automation of our supermarket visit could also be a factor – we know all too well the ubiquity of the self-service checkouts (and its familiar refrain of “Unexpected item in the bagging area”). Our changing shopping habits, towards smaller and more regular ‘top-up’ shops, lend themselves to these devices.

If consumers are happy to do more regular, smaller shopping trips then the need for bodies on the shop floor will continue to decline.

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