Sainsbury’s joins Tesco in cutting store management roles to reduce costs
Following close behind the news that Tesco is cutting 1,700 management roles from its stores and warehouses, Sainsbury’s yesterday announced a major management shake-up at its supermarkets, putting thousands of jobs at risk.
The move will see a number of senior roles, such as deputy manager, department manager, team leader and store supervisor, axed at its larger outlets and convenience stores with staff given the choice of applying for newly created customer and trading management roles which are better paid. However, there will be fewer management jobs at the end of the process and any staff that do not gain one of the new roles will have to accept a more junior position or face redundancy.
Sainsbury’s did not confirm exactly how many jobs would affected by the process but said it was “in the thousands”. However, the group stressed that its intention was not to reduce overall headcount as a result of the proposals.
Commenting on the changes, Simon Roberts, Sainsbury’s Retail and Operations Director, said: “We’re proposing a store management structure that will deliver best in class leadership and, in many cases, will offer an improved reward package for new management roles.
“The proposals will introduce a more efficient and effective structure, designed to meet the challenges of today’s retail environment. They will deliver cost savings to be invested in our customer offer and in our colleagues as they continue to provide the very best service for our customers.”
Amid the competitive trading conditions and changing shopper trends, all the major grocers are trying to cut costs and simplify their operations. Supermarkets have also had to absorb some commodity price increases, driven partly by the fall in the value of the pound, whilst costs have risen due to recent hikes in the national living wage and business rate changes.
Sainsbury’s is trying to save £500m over the next three years. Earlier this month, it said it was on track to achieve £185m of cost savings this year, putting it ahead of target. Last year, Sainsbury’s announced that it was slashing 3,000 roles in its human resources, head office and payroll departments as part of the cost cutting drive.
Philip Dorrell, Managing Partner at Retail Remedy, said Sainsbury’s and Tesco’s latest moves reflected the “ongoing stresses” in the retail sector and were driven by a need to reduce costs in the face of shrinking profit margins.
He added: “They are shrinking as the discounters have fuelled a need to be more competitive on price, at a time when the volumes that the retailers are selling reduce.”