Sainsbury's plans to cut about 500 jobs at its store support centres as UK grocers seek to bring down costs amid a supermarket price war.
The reductions at centres located in the English cities of London, Manchester and Coventry are the result of a cost and structural review taken by Sainsbury’s board, the company said today. About 13 per cent of the workforce at the locations will be affected, a company representative said.
The cuts are part of three-year program to reduce expenses by £500 million announced by Sainsbury's in November.
They follow store closure plans announced in the past week by rivals Tesco and Morrisons as UK grocers seek savings amid the battle with discounters Aldi and Lidl.
Morrisons said it plans to shut 10 loss-making stores employing more than 400 people.
Sainsbury’s cuts will leave the grocer "in a stronger position to deliver our new strategy and better equipped to win in these times of change” chief executive officer Mike Coupe said. "I recognize that these changes will be difficult."
Sainsbury’s announcement comes on the day that researcher Kantar Worldpanel said the grocer had the best results of the UK’s four biggest supermarkets over the last 12 weeks, sending the shares up 3.6 per cent at the close in London.
Sales at the retailer fell 0.7 per cent in the 12 weeks ended 4 January, Kantar said, while Tesco, Morrison and Wal-Mart Stores's Asda all recorded declines of more than one per cent.
Sainsbury’s stronger performance over the holiday period means it has regained its position as Britain’s second-biggest supermarket behind Tesco, Kantar said, surpassing Asda’s market share for the first time since 2003.
Bloomberg News, edited by ESM
