British supermarket group Sainsbury’s said on Thursday up to 3,500 jobs were at risk in a restructuring that will see it close 420 standalone Argos stores and shut down all in-store meat, fish and deli counters.
Sainsbury’s said it aimed to find alternative roles for as many impacted employees as possible, pointing out it had hired 52,000 since March.
The group reported a loss before tax of 137 million pounds for the 28 weeks to Sept. 19, reflecting 438 million pounds of one-off costs associated with the Argos closures and other strategic changes introduced by Simon Roberts, who succeeded Mike Coupe as chief executive in June.
He plans to refocus on Sainsbury’s core food business, lowering prices, accelerating food innovation and growing online grocery services.
Roberts also wants to increase the rate of new convenience store and neighbourhood hub openings over the next three years.
“We will put food back at the heart of Sainsbury’s,” he said.
“Our other brands – Argos, Habitat, Tu, Nectar and Sainsbury’s Bank – must deliver for their customers and for our shareholders in their own right.”
Underlying pretax profit was 301 million pounds. That was ahead of analysts’ average forecast of 275 million pounds and 238 million pounds made in the same period last year, as strong sales during the COVID-19 pandemic outweighed extra costs and losses at Sainsbury’s Bank.
First half like-for-like retail sales rose 6.9%, having been up 8.2% in the first quarter.
Sainsbury’s said it expected its new plan to drive an inflection in underlying profit momentum, with pretax profit in the year to March 2022 forecast to exceed those reported in the year to March 2020, which were not impacted by COVID-19.
Shares in the group, down 9% so far in 2020, closed Wednesday at 209 pence, valuing the business at 4.7 billion pounds. They rose 1% in early trade.