Sainsbury’s (LON: SBRY) has announced plans to cut 3,500 jobs.
The supermarket will closes meat, fish and deli counters as well as 420 standalone Argos stores.
The news came as Sainsbury’s posted a pretax loss of £137m for the six months ended 19 September. This loss is down from a £9m profit a year earlier.
Simon Roberts, Sainsbury’s chief executive, said: “We are talking to colleagues today about where the changes we are announcing in Argos standalone stores and food counters impact their roles.”
“We will work really hard to find alternative roles for as many of these colleagues as possible and expect to be able to offer alternative roles for the majority of impacted colleagues.”
The changes come as online sales have increased from 19% a year ago to 40%.
Despite the new job cuts, the group has said that it expects to create 6,000 net new jobs by the end of the year.
The supermarket will pay out £232m in dividends.
Commenting on the latest results from Sainsburys’ Julie Palmer, partner at Begbies Traynor:
“Despite rising sales the big news from Sainsbury’s is that as we dive head first into lockdown and the run up to Christmas, it is closing Argos stores and potentially cutting jobs to restructure its model for the coronaconomy. As more businesses evolve to fit the current climate this will not be abnormal and we will see more restructuring and redeploying resource in the final quarter of 2020 and the first of 2021.”
“In the case of Sainsbury’s, its business model was already in transition as planned Argos closures were taking place, but in order to keep its market share in the next few months it has to seek ways to keep the new customers it has won this year.”
In October, Sainsbury’s announced plans to partner with Deliveroo so shoppers will be able to purchase up to order from more than 1,000 products through the Deliveroo app and have them delivered within 20 minutes.
Clodagh Moriarty, Sainsbury’s Group Chief Digital Officer said, “With more and more shoppers looking for convenient and affordable meals delivered to their doors, our trial with Deliveroo brings our great value hot food direct to customers’ homes. We’re committed to making it as quick and easy as possible for our customers to shop with us and we’ll be listening to their feedback throughout the trial to understand how we can best serve their hot food delivery needs. We’re excited to see what our customers think before deciding if, how and where we go next with the offer.”