(qlmbusinessnews.com . Mon 25th Jan, 2025) London, UK —
“Cafés and Counters to Go as Sainsbury’s Faces Rising Costs”
Sainsbury’s has announced it will eliminate 3,000 jobs as part of its latest cost-cutting strategy, which includes closing its remaining cafés and discontinuing patisserie and pizza counters. The retailer aims to “simplify the business” in response to challenging economic conditions, noting that the cafés were not widely used by customers.
The company also plans to reduce its senior management workforce by 20%, citing mounting financial pressures, including a rise in employer National Insurance contributions announced in the recent Budget.
Despite delivering strong Christmas trading figures and forecasting annual profits exceeding £1 billion, Sainsbury’s CEO Simon Roberts has warned of “tough choices” ahead. The rise in employer National Insurance, expected to cost the supermarket £140 million annually starting in April, has been a significant factor in the decision to restructure.
The closures will impact the retailer’s remaining 61 cafés, hot food counters, and pizza and patisserie stations, with plans to offer popular items directly in store aisles instead. In addition, job cuts will extend to Sainsbury’s head office as part of efforts to streamline decision-making and cut costs.
These job reductions follow a similar move last February, when Sainsbury’s cut 1,500 roles. The supermarket is currently implementing a £1 billion cost-saving initiative to address rising expenses and maintain profitability.
Critics, including Unite the Union, have condemned the decision, accusing Sainsbury’s of prioritising profits over workers. Unite official Paul Travers said the company should feel “ashamed” for making job cuts while posting significant profits.
However, retail experts, such as Catherine Shuttleworth from marketing firm Savvy, believe Sainsbury’s move signals wider cost-cutting trends across the retail sector. Shuttleworth warned that services for shoppers are likely to be reduced as businesses grapple with increasing labour costs.
The British Retail Consortium has echoed concerns that rising costs, exacerbated by the Budget measures, could lead to further job losses, reduced investment, and higher prices for consumers.
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