Sainsbury’s revealed plans to cut most of its cafés and hot food counters, and reduce management roles by a quarter.
Simon Roberts said that the job cuts are part of the previously announced effort to cut PS1bn in costs, as the company was “facing a particularly difficult cost environment”.
His comments were made shortly after the supermarket reported a record-breaking Christmas for sales and market shares.
He said: “We had to make difficult choices about where to invest, and where to change things to make our business more effective and efficient. We must make the decisions that we announce today to continue our momentum.
The supermarket claimed that the move was made to save money before the budget tax measures would increase costs. Employers’ national insurance rates are set to increase in April from 13.8% up to 15%, and the NI thresholds for taxable income will also change. The increase is estimated to cost Sainsbury’s around PS140m.
Roberts’ announcement was made despite Sainsburys’ decision to give significant pay increases , announced ten days earlier, to store employees.
Sainsbury’s managerial cull was the result of reorganising its departments at head office in order to create “fewer roles, larger ones with clearer accountability”. The company said that the changes will “drive quicker decision-making and reduce costs”.
The supermarket said that all job cuts will be subject to consultation. The supermarket said that the majority of Sainsbury’s loyal customers do not frequent its cafes. It also added, “cafes and food halls operated by specialist partners are more and more in demand.”
The company stated that it would redeploy employees where possible, and provide a package of support to those who are affected which exceeds the statutory requirements.
Sainsbury’s put 2,000 jobs on the line three years ago when it closed 200 in-store cafés and 34 hot food counters.
Sainsbury’s reported a 2.7% increase in retail sales during the third quarter of the year, which covers the 16-week period ending 4 January 2025.
Sainsbury’s saw sales rise by 3.7% for the quarter, and by 3.8% over the six-week Christmas period (to 4 January).
This chain has more than 800 convenience shops and almost 600 supermarkets. It employs over 148,000 people.
Jane Hallas is the head of team for WorkNest. She said that there has not been a major shift towards redundancy in the UK. “We have begun to see an increase in redundancy requests across most sectors. Some employers plan to make changes before the April changes to the national minimum wage, and the employers’ national insurance rate.
“However it is important to note that the UK redundancy rate is still under 5%. The latest ONS data shows 3.8 per 1000 employees for the period of September to November 2024, and the provisional December data indicates an estimated decrease of 0.2% for employees who are paid by the hour. This is a much better figure than the ONS figure between September and Novembre 2020 of 14.3 per 1000 employees. “We expect that this trend will persist in the short-to-medium term.”
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