Sainsbury’s has announced plans to overhaul its operations, which could result in 3,000 job losses as the company closes most of its in-store cafes and hot food counters and reduces management roles by 20%.
Simon Roberts, the retail giant’s chief executive, explained that the move is part of a broader strategy to cut £1 billion in costs amid rising financial pressures. “We are operating in an exceptionally challenging cost environment,” Roberts stated.
His comments came soon after the supermarket announced a successful, record-breaking Christmas in terms of sales and market share.
He said: “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. The decisions we are announcing today are essential to ensure we continue to drive forward our momentum.”
The restructuring comes as businesses across the UK brace for financial challenges, including an increase in employers’ national insurance contributions from 13.8% to 15% in April and changes to NI thresholds. This adjustment alone may cost Sainsbury’s an additional £140 million annually.
While the supermarket recently granted pay increases to its store workers, Roberts emphasised the need to balance employee investments with long-term cost-saving measures.
Café closures
Sainsbury’s plans to close most of its cafes and hot food counters, citing low demand from its core customer base. The company highlighted that cafes and food halls operated by third-party specialists are increasingly favoured by shoppers.
The retailer will also restructure its management teams, consolidating roles at its head office to create more prominent positions with clearer responsibilities. These changes aim to accelerate decision-making and reduce operational expenses.
In addition, the company assured that all job cuts would undergo a consultation process. Efforts will be made to redeploy affected workers where possible, and Sainsbury’s aims to provide a support package exceeding statutory requirements for those impacted.
This isn’t the first time Sainsbury’s has reduced its in-store food offerings. In 2022, the chain closed 200 cafes and 34 hot food counters, a decision that put 2,000 jobs at risk.
Record-breaking sales amid restructuring
The restructuring plans follow Sainsbury’s “biggest Christmas ever,” with total retail sales rising 2.7% during the 16 weeks leading up to January 4, 2025. Sales grew by 3.7% in the third quarter, with an impressive 3.8% jump during Christmas.
Sainsbury’s operates almost 600 supermarkets and more than 800 convenience stores, employing 148,000 people across the UK. This move highlights the pressures UK businesses face as they navigate rising costs while striving to remain competitive. The company’s promise of redeployment opportunities and enhanced support will be key in easing the transition for affected employees.