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Sainsbury’s has warned that 3,500 of its staff could be made redundant across its supermarket counters and Argos stores, in what is a major restructuring of the business.
The supermarket said it has now closed all of its meat, fish and deli counters due to “reduced customer demand”, adding that the closures will “make stores simpler to run and reduce food waste”.
In addition, the group confirmed that 120 of its standalone Argos stores that have not reopened since March will now close permanently. Looking ahead, the group aims to close around 420 standalone Argos stores by March 2024, reducing the UK Argos standalone store estate to around 100.
In the same period, however, it will open up to 150 more Argos stores in Sainsbury’s sites, and add 150 to 200 more Argos collection points in supermarkets and convenience stores.
In a statement, Sainsbury’s said: “We have many job opportunities for colleagues who work on our food counters or in our Argos standalone stores that are closing, but vacancies might not always be in the right location or at suitable hours for all colleagues.
“Whilst we will aim to find alternative roles for as many colleagues as possible, around 3,500 of our colleagues could lose their roles as a result of our proposals.”
It added: “Including these proposals, we expect to increase our colleague population by 6,000 roles by the end of the financial year.
“We have an excellent track record of finding alternative roles for colleagues – for example, where we have moved colleagues from Argos standalone stores to stores in Sainsbury’s supermarkets, we have retained 90 per cent of colleagues. We will do everything possible to find alternative roles for our colleagues.”
Its latest restructuring update was published alongside the group’s financial results for the half-year ended 19 September 2020.
Total retail sales were up by 7.1% in the period, with like-for-like sales up by 6.9%. In addition, digital sales soared by 117% to £5.8bn, making up nearly 40% of total sales.
Groceries Online sales also soared by 102%, after the group more than doubled its online capacity and volume since March. Some 17% of its grocery sales are now online, against the 7% reported in March.
Argos sales also grew by nearly 11% in the first half, with 90% of sales originating online.
Nonetheless, the group fell to a pre-tax loss of £137m, reflecting £438m of one-off costs associated with Argos store closures and other strategic and market changes.
It still, however, expects its full-year underlying pre-tax profit to be at least 5% higher than last year, reflecting “stronger than expected sales” in the period.
