Sainsbury’s to open more c-stores in restructuring; 3500 jobs to go

Sainsbury's said on Thursday up to 3,500 jobs were at risk in a restructuring that will see it close 420 standalone Argos stores and shut down all in-store meat, fish and deli counters.

The news comes after several other British groups such as retailer John Lewis and domestic bank Lloyds Banking Group launched redundancy plans on the eve of the second national lockdown in England.

Sainsbury's said it aimed to find alternative roles for as many impacted employees as possible, pointing out it had hired 52,000 since March.

The group reported a loss before tax of £137 million for the 28 weeks to 19 September, reflecting £438 million of one-off costs associated with the Argos closures and other strategic changes introduced by Simon Roberts, who succeeded Mike Coupe as chief executive in June.

He plans to refocus on Sainsbury's core food business, lowering prices, accelerating food innovation and growing online grocery services.

Roberts also wants to increase the rate of new convenience store and neighbourhood hub openings over the next three years.

"We will put food back at the heart of Sainsbury's," he said.

"Our other brands - Argos, Habitat, Tu, Nectar and Sainsbury's Bank - must deliver for their customers and for our shareholders in their own right."

Underlying pretax profit was £301 million. That was ahead of analysts' average forecast of £275 million pounds and £238 million pounds made in the same period last year, as strong sales during the COVID-19 pandemic outweighed extra costs and losses at Sainsbury's Bank.

First half like-for-like retail sales rose 6.9 per cent, having been up 8.2 per cent in the first quarter.

Sainsbury's said it expected its new plan to drive an inflection in underlying profit momentum, with pretax profit in the year to March 2022 forecast to exceed those reported in the year to March 2020, which were not impacted by COVID-19.

John Lewis said on Wednesday it would cut 1,500 head office jobs as part of its strategy to return to sustainable profit by 2025.

The employee-owned department stores and Waitrose supermarket group, which reported a first-half loss of £635 million in September, said the proposed redundancies would save £50 million a year.

The cuts will fall on employees - or what it calls partners - at its sites in central London and Bracknell, west of London, where the group employs about 5,000 people in total. The job losses will be complete by April 2021, it said.

In July, the department store division said it would close eight stores, putting 1,300 jobs at risk.