Sainsbury to cut 800 jobs as part of £500m savings drive

J Sainsbury is set to cut 800 jobs from its 161,000 workforce as part of its drive to save £500m over the next three years, as fierce price competition in the supermarket sector shows no sign of abating.

Just a day after Tesco announced a record £6.4bn pre-tax loss, mostly due to slashing the value of its store estate, Sainsbury's said it would remove "department and deputy managers" from some stores, while offering its shelf-stackers and till staff more hours and additional shifts.

The moves follow recent job cuts from Tesco and Wm Morrison. But the two chains, while shedding head office jobs, are boosting staff numbers in stores.

Sainsbury said its changes were designed to boost efficiency, but also improve service to customers, with more staff on the shop floor, and better availability at times that mattered to shoppers.

Under the changes, Sainsbury will remove a management layer from stores. A proportion of the savings from this move would be reinvested back into having more staff to serve customers.

At the same time, Sainsbury was consulting on removing the night shift in more than 100 stores, and replacing this with staff who replenished stock early in the morning and mid-afternoon, so that shelves were full when customers shopped in the evening.

While night-shift workers would be offered the opportunity to move to the new shifts, Sainsbury said it recognised that many would not want to move, and that 800 people would leave the business.

The measures will contribute to the target set out by chief executive Mike Coupe last autumn of saving £500m over the next three years. Sainsbury did not specify the cost of the changes.

The moves come as Britain's big supermarkets attempt to fight the no-frills discounters Aldi and Lidl, who have been expanding rapidly.

But while they are shedding costs to pump into lower prices, Britain's big supermarkets are also attempting to compete with the discounters by having better service.

Dave Lewis, chief executive of Tesco, said on Wednesday that the retailer, while cutting about 6,500 jobs at its British head office, its bank, its Indian shared service centre and in central Europe, had added 4,650 staff in stores.

Morrison said it was recruiting 5,000 staff in store, while cutting 720 head office jobs.

Steve Dresser, who runs the Grocery Insight website said it was "always sad to hear of people losing their roles, but it's another sign that the industry is changing and a byproduct of volume shifting to the discounters and indeed, online stores."

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