Sainsbury’s is set to axe 3,000 jobs as the supermarket group closes the cafés, and patisserie and pizza counters, that remain across its estate, marking a significant restructure to the business as demand for its cafés falls.
It is understood that the move will streamline the business, with the supermarket group saying that the cafés are not regularly used by customers.
Sainsbury’s will close its remaining 61 cafés, and is also getting rid of its hot food counters.
Although some popular items are intended to be moved into the supermarket aisles at Sainsbury’s stores, this change does pose questions around the future viability of in-store cafe or hot food offerings from large retailers.
This café model has been successful for other supermarket groups in the UK in recent years, but perhaps this move from Sainsbury’s is a sign that demand for such services at some supermarkets could be reducing.
As part of the plans, the company intends to reduce senior management positions by around 20%.
Roles to be cut include regional people manager, store people manager and case specialist, with people in these roles being placed at risk of redundancy.
Sainsbury’s was aiming to save £1 billion in the next few years and reported strong trading results in its recent financial update, with annual profits set to surpass £1bn.
The supermarket group said the rise in employer National Insurance contributions will cost it £140 million from April, when the changes come into effect, adding to cost pressures facing the business.
In a statement, Simon Roberts, Sainsbury’s chief executive, said: “We launched our Next Level Strategy almost a year ago and are totally focused on making good food joyful, accessible and affordable for everyone, every day. As a result, we’re seeing real momentum across our business, with a best-ever value position, leading quality and increasing market share.
“As we accelerate into year two and beyond of our strategy, we are facing into a particularly challenging cost environment which means we have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective.”
He added that the decisions are “essential to ensure we continue to drive forward our momentum but have also meant some difficult choices impacting our dedicated colleagues in a number of parts of our business”.
With rival Morrison’s also recently announcing plans to cut hundreds of office-based jobs, it appears that the challenging trading conditions affecting dining businesses across the UK are also heavily affecting supermarkets in a very visible way.
