Britain’s biggest supermarket group Tesco plans to cut about 400 jobs from stores and its head office, seeking efficiency savings so it can invest in the business, it said.
The move follows that of Sainsbury’s, the No. 2 player, which said last week it planned to reduce its headcount by over 3,000 roles.
British companies, and particularly large employers, are facing increased costs this year after the new Labour government’s first budget in October hiked employer social security payments and the national minimum wage.
‘We have started speaking to colleagues about a number of proposed changes in our stores and head office, including changing our bakery model in some stores, and updating our management structure in Tesco Mobile phone shops,’ Tesco said.
‘Taken together, the changes we are proposing mean that around 400 roles will be removed.’
Tesco said it would try and find alternative roles for impacted staff, noting it currently has 1,000 vacancies across the business.
Christmas Trading
Earlier this month, the supermarket group, kept its full-year profit outlook as it reported a 4.1% rise in underlying UK sales for the key Christmas trading period, winning market share from rivals.
Under chief executive Ken Murphy the group is reaping the rewards of a programme to improve the value and quality of its products, step-up innovation and enhance its customer service.
“We delivered our biggest ever Christmas, with continued market share growth and switching gains,” he said.
However, AJ Bell, one of the largest investment platforms in the UK, cautioned this month that ‘investors have fallen out of love with the retail sector, after 11 out of 20 companies with UK retail operations have seen their share prices fall on Christmas trading updates.
