Sainsbury’s, one of the UK’s largest supermarket chains, has announced plans to cut 3,000 jobs as part of its cost-saving measures in response to rising labor expenses. The cuts will involve the closure of all remaining hot food counters, pizza counters, and cafes, as well as a 20% reduction in senior management roles.
Simon Roberts, CEO of Sainsbury’s, explained that the decision is part of the company’s ongoing effort to reduce costs by £1 billion in a challenging economic climate. “We’ve had to make tough choices about where to invest and where to make changes to ensure our business remains efficient and effective,” he said.
Closure of Counters and Cafes
The move will see Sainsbury’s close all 61 remaining in-store cafes, redirecting customers to alternative food halls and specialist-run cafes. Additionally, hot food, pizza, and patisserie counters will be phased out, with popular items shifting to regular aisles and the introduction of “self-serve” bread slicing stations.
According to Sainsbury’s, the majority of its loyal customers do not regularly use the cafes, and partnering with specialist providers for food hall services has become increasingly popular.
Job Cuts in Senior Management
In addition to front-line changes, the supermarket is restructuring its head office operations by creating “fewer, bigger roles with clearer accountabilities.” This is expected to reduce senior management positions by 20% over the coming months. The company says the changes aim to drive faster decision-making while bringing costs down.
Retail Performance and Industry Challenges
While Sainsbury’s recently reported its “biggest ever Christmas,” with sales increasing by 3.8% over the festive season, the company is preparing for significant financial challenges. UK retailers face rising employer national insurance contributions and a 6.7% increase in the national minimum wage this year, which could put further pressure on profit margins.
Despite the closures, Sainsbury’s stated it will aim to redeploy affected employees where possible and offer support packages that exceed statutory requirements.
Sainsbury’s operates nearly 600 supermarkets and over 800 convenience stores across the UK, employing approximately 148,000 people.
