Sainsbury’s has announced it will cut 3,000 jobs as it shuts down its remaining cafés and closes its patisserie and pizza counters.
The supermarket says the move will “simplify the business”, adding that most Sainsbury’s shoppers “do not use the cafés regularly”.
Sainsbury’s also plans to make a 20% reduction in senior management roles, saying the business faces a “particularly challenging cost environment”.
Although Sainsbury’s was already in the midst of a plan to save £1bn over the next few years, the BBC understands the rise in employer’s National Insurance contributions set out in the Budget has also been a factor in the latest restructuring plan.
In response to Sainsbury’s announcement, Downing Street said: “As we said at the Budget, difficult decisions were needed to restore economic stability, and put the public finances back on to a stable footing.”
Sainsbury’s recently reported strong Christmas trading and said it expected annual profits to surpass £1bn.
But when he unveiled the trading figures earlier this month, chief executive Simon Roberts repeated his warning about the impact of measures announced by Chancellor Rachel Reeves and said there would be “tough choices”.
Sainsbury’s has said the rise in employer’s NI contributions will cost it £140m from April.
The industry trade body, the British Retail Consortium, reckons higher costs for retailers will impact investment, jobs and lead to higher prices.
Shadow business secretary Andrew Griffith said the cuts by Sainsbury’s were “devastating but no surprise”, adding that the government should “undo its jobs tax”.
In the Budget, Reeves announced that the rate of National Insurance paid by employers would rise to 15% in April while the salary threshold at which payments begin would drop from £9,100 to £5,000.
The government expects the measure to raise £20bn.
Early last year, the previous Conservative government twice cut National Insurance payments made by workers, reducing the rate by 4% in total at a cost of billions of pounds.
The Unite union said the job cuts were “a blatant example of profiteering on the backs of workers”.
“Once again, the lowest paid workers are paying the price for corporate greed,” said Unite’s officer for food, Paul Travers.
He said the supermarket should be “ashamed” for cutting jobs while making millions of pounds in profit.
This is the second wave of major job cuts for Sainsbury’s in just over a year. Last February, it announced 1,500 roles would go.
The supermarket will shut down its remaining 61 cafés and, as well as pizza and patisserie, will also dispense with its hot food counters.
Instead it will make “the most popular items available in the aisle”.
A fortnight ago, Sainsbury’s said it would raise its average hourly pay by 5% to £12.60. But the wage increase will be introduced in two phases “to help manage a particularly tough cost-inflation environment”.
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