Published On: Wed, Jan 14th, 2015

Sainsbury to Implement Layoffs Under Expense Reduction Program



J Sainsbury Plc plans to cut about 500 jobs at its store support centers as U.K. grocers seek to bring down costs amid a supermarket price war, Bloomberg said.

The reductions at centers located in London, Manchester and Coventry are the result of a cost and structural review taken by Sainsbury’s board, the company said today. About 13 percent of the workforce at the locations will be affected, a company representative said by e-mail, the report said.

The cuts are part of three-year program to reduce expenses by 500 million pounds ($758 million) announced by Sainsbury in November. They follow store closure plans announced in the past week by rivals Tesco Plc and William Morrison Supermarkets Plc as U.K. grocers seek savings amid the battle with discounters Aldi and Lidl. Morrison said today it plans to shut 10 loss-making stores employing more than 400 people, Bloomberg said.

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 U.K.’s four biggest supermarkets over the last 12 weeks, sending the shares up 3.6 percent at the close in London, the report said.

Sales at the retailer fell 0.7 percent in the 12 weeks ended Jan. 4, Kantar said, while Tesco, Morrison and Wal-Mart Stores Inc.’s Asda all recorded declines of more than 1 percent, Bloomberg said.

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, the report said.

Sainsbury had 16.9 percent of the market in the latest period, compared with Asda’s 16.8 percent. Tesco’s share declined to 29.1 percent from 29.6 percent a year earlier, while Aldi and Lidl’s combined share rose to 8.3 percent from 7.1 percent a year ago, Kantar said, according to Bloomberg.

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