Up to 3,500 jobs are at risk at Sainsbury’s as the supermarket closes more than 400 standalone Argos stores and cuts all meat, fish and deli counters.
The supermarket said about 150 Argos stores would be moved into its supermarkets to crack down on costs.
The changes come as Sainsbury’s said 40% of its sales were now online – compared with 19% a year ago. The company said it aimed to find new roles for all the staff affected and it would boost the overall number of people it employed by 6,000 by March.
Simon Roberts, the chief executive of Sainsbury’s said: “Covid-19 has accelerated a number of shifts in our industry. Investments over recent years in digital and technology have laid the foundations for us to flex and adapt quickly as customers needed to shop differently.”
The cost-cutting plan comes after Sainsbury’s slid to a pretax loss of £137m in the six months to 19 September from a £9m profit in the same period a year before, as total sales slipped 1.4%. Sales were hit by a fall in petrol and clothing sales which offset an 8.2% rise in sales of groceries and 7.4% rise in general merchandise led by Argos.
However, the company said it would pay out £232m in dividends – almost the same amount as it claimed in business rates relief from the government. The payout decision – which Sainsbury’s delayed by several months – comes despite similar payouts by Tesco and Morrisons drawing heavy criticism.
Sainsbury’s said it had faced one-off costs of £438m related to the closure of Argos stores and other measures as well as £290m on protective measures for staff and customers during the pandemic in the half-year period.