Sainsbury’s is to cut 800 jobs in its stores as part of plans to save £500m over the next three years. The supermarket, which axed 500 head office jobs in January, said it would be cutting department and deputy manager positions in some stores. It is also replacing night shifts with early morning and evening shifts in some stores – a change it said would improve product availability.
Roger Burnley, retail and operations director, said: “These are exceptionally difficult decisions to make and we have not taken them lightly ... We set out very clearly last year that we have to reflect the changes in when and how our customers are shopping. These proposals will help us maintain and improve customer service by having more colleagues on hand and well-replenished shelves at all times.”
The move follows similar decisions by Morrisons and Asda, which cut thousands of store management roles last year. Tesco is finalising 2,500 similar job cuts this month, as well as 2,418 job cuts at its head offices. Even Booths, the upmarket northern grocer, revealed on Thursday that it is consulting on cutting 100 store management jobs and reducing staff hours.
Sainsbury’s has begun consultation in more than 100 stores about the way they are restocked overnight. More than 500 roles will be affected, but the company said many night-shift workers could be redeployed or moved to nearby stores.
Steve Dresser, an analyst at Grocery Insight, said the job cuts were a recognition of lower volumes and sales at the major supermarkets. “There isn’t a need for the overnight operation in a quiet store. Not when there is a cheaper way to operate that won’t be noticed by customers,” he said. “It’s another sign that the industry is changing and a byproduct of volume shifting to the discounters and online stores.”
All the major supermarkets have seen sales and profits fall thanks to growing competition from discounters including Aldi and Lidl. The grocery market has also been hit by deflation in food commodities after strong harvests around the world, while shoppers continue to keep a tight rein on their budgets after years of tough economic times.
The supermarkets need more funds to finance millions of pounds’ worth of price cuts, particularly on everyday basics such as milk, eggs and bread, in order to dissuade their customers from migrating to the low-cost chains.
Falling prices drove Sainsbury’s sales at established stores excluding fuel down 1.9% in the 10 weeks to 14 March. It has pledged to spend £150m on price cuts this year.
Management and head office jobs have been targeted by supermarkets as they try to retain superior customer service and more attractive stores than cheaper rivals while reducing costs. Tesco and Morrisons have slashed management roles but added more shop-floor staff in an attempt to boost service.
By Sarah Butler - The Guardian