Sainsbury’s will cut 3,500 jobs, it was announced this morning, as the firm posted a £137m loss for the first half of the year.
The grocer said that the majority of the job losses would come from Argos, which it bought in 2016.
Due to the success of integrating Argos stores into Sainsbury’s locations, it said that it would shut 420 standalone Argos shops by 2024.
To replace these it will add 150 more in-house stores, and also 150-200 collection points.
Some jobs will also be lost from its fresh meat and fish counters, which will close along with its delicatessens.
Sainsbury’s said that the move would help it to free up £600m in additional annual funding every year by 2024.
Chief exec Simon Roberts promised to “put food back at the heart of Sainsbury’s” through the move.
“While we are working hard to help feed the nation through the pandemic, we have also spent time thinking about how we deliver for our customers and our shareholders over the longer term”, he said.
“To support our ambition in food, we are accelerating our ambition to structurally reduce our cost base right across the business so we can invest faster back into our core food offer.”
The announcement came as the supermarket reported its half year results this morning.
It said that its loss was largely due to £438m in one-off costs relating to the closure of Argos stores.
But the grocer will pay a special 7.3p dividend in lieu of a final payout, it was announced.
Shares in the company dropped 3.6 per cent this morning.
Excluding fuel, total sales rose 7.1 per cent across the six month period, while digital sales jumped 117 per cent to £5.8bn.
These now make up nearly 40 per cent of total sales, Sainsbury’s said.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown: “J Sainsbury has been riding the wave of online shopping during the pandemic with digital sales up to £5.8 billion.
“What’s impressive is that its collected many more clicks for not just food orders but general merchandise as well, with total retail sales up 7.1 per cent.”
She said that she expected the boost to continue into the second national lockdown:
“J Sainsbury clearly has a razor sharp focus on growing its online business to meet customer demand.
“Given that Christmas shopping opportunities will be so limited elsewhere, the food and gift mix it offers in its physical store is also likely to help keep tills ringing during lockdown mark 2.”