Author Felicity Anderson
Britain’s second-largest supermarket chain Sainsbury’s is cutting around 2000 jobs as part of an ambitious drive to reduce £500m of costs over the next three years.
July saw the firm celebrate its best figures in four years, with same-store sales up by 2.3%.
Yet cheerful numbers amid tough economic conditions and competition with major discounters Aldi and Lidl, weren’t enough to secure jobs across its stores.
A Sainsbury’s spokesman explained that the UK grocery market was “changing at a rapid pace” with the firm required to “transform the way we operate,” reports the BBC.
Where are the Sainsbury’s job losses?
J Sainsbury owns the grocery chain, newly acquired Argos, Sainsbury’s bank and Habitat, currently employing nearly 200,000 staff overall.
Most of the job cuts will be across its supermarket stores, within HR and payroll departments, with staff being offered alternative roles where possible or redundancy.
A Sainsbury’s spokesman explained to the BBC that the changes were difficult but necessary, saying,
“This has been a difficult decision and we appreciate that this will be a tough time for those colleagues affected by the changes. We will support them in any way we can,” he added.
Increased sales not enough in difficult market conditions
Sainsbury’s isn’t the only major supermarket making big changes to staffing in recent months, with both Tesco and Asda restructuring and reducing their headcounts.
The Independent reports that in August Asda confirmed it would cut nearly 300 jobs at its head office while 800 employees would see their job descriptions overhauled as, “part of a shakeup.”
Sainsbury’s biggest rival Tesco, meanwhile, is also, “shrinking its headcount,” announcing that it was cutting 1,200 jobs from its head office, “just days after revealing that more than a thousand jobs were going at its Cardiff call centre,” according to the BBC.
“A perfect storm”
Emma Simpson, a business correspondent at the BBC, explains the perilous situation for the UK’s largest supermarkets as they attempt to cut costs and restructure, “to face the perfect storm of rising costs and changing shopping habits.”
She notes, “and with the competition still cutthroat from the discounters, they can’t afford to recover those costs by putting up prices too much for the consumer.”
“Sainsbury’s and its other main rivals are all trying to reduce operating costs and simplify their businesses to make them more efficient. It’s a big, structural, shift and painful for all those affected.”