Sainsbury's slashes 2000 jobs

Sainsbury's Illustration
By Reidar Molthe

30 October 2017 13:28

Sainsbury's slashes 2000 jobs

The British supermarket chain Sainsbury’s is axing 2,000 store and back office roles to cut £500 million(!) in costs. The big question is if cost cutting is enough, or if the whole business model must be changed?

The reason behind the drastic cuts are the intense price war with the German low-price chains Aldi and Lidl, writes The Guardian (

The big four supermarkets –Tesco, Sainsbury’s, Asda and Morrisons – are losing market share to Aldi and Lidl, and has done so a long time.  

“The UK grocery market is changing at a rapid pace and it’s crucial that we transform the way we operate to meet future challenges and continue to provide customers with best in class service,” says a Sainsbury’s spokesman to The Guardian.

Sainsbury’s is not alone. All the big British supermarket chains have announced job cuts as they seek to compete with the fast-growing German discounters.

Tesco is shedding 2,300 staff as part of a cost-cutting programme. Thousands of Asda (owned by Walmart) workers are facing redundancy or a dramatic cut in their working hours as Britain’s third-largest supermarket chain also looks to cut costs.

Cost cutting continues for years to come

Sainsbury’s, which employs about 119,000 full-time staff, is moving towards a centralised HR model as it overhauls to save hundreds of millions of pounds. The company will reach the end of a three-year plan to save £500m in March 2018, but Mike Coupe, the chief executive, has said it will then embark on a new programme designed to save the same amount again.

In March, Sainsbury’s said it was cutting 400 jobs in store while another 4,000 workers would face changes to their working hours as it looked to run its supermarkets more cheaply. The changes included scrapping the night shift in 140 supermarkets.

Kantar Worldpanel predicts that Aldi and Lidl with a combined market share of 12% today, will increase to 15% over the next three years; a level that will force rival bosses to rethink their business models again.

Revenue gains by the discounters comes at the expense of the big four, Tesco, Sainsbury’s, Morrisons and Asda. How the loss in market share will spread out among the big four is the exiting question no one can answer today.

The price war goes on!

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