UK supermarket chain Sainsbury’s (JSAIY) will axe 3,000 jobs, including senior managers, as part of sweeping changes aimed at contending with a more challenging retail landscape.
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The news came just hours before data showed UK consumer confidence plunged in January to its lowest level in a year, amid rising taxes and warnings about job losses.
Sainsbury’s said the job cuts, which will see a cull of 20% of senior managers, were part of a previously announced plan to trim £1 billion ($1.24 billion) in costs.
CEO Simon Roberts said the business was “facing into a particularly challenging cost environment” after the retail sector warned of a £7 billion hit from the Budget last year, with Sainsbury’s saying it will take a £140 million immediate tax hit after the Chancellor, Rachel Reeves, raised employer National Insurance costs.
“We have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective,” said Roberts.
UK Consumer Confidence Falls
The job cuts come as the latest consumer confidence index from GfK fell five points from December to -22, three points lower than January 2023.
Expectations for personal finances in the coming year dropped back into negative territory, while respondents seemed just as gloomy about prospects for the wider economy, with the sub-index sliding eight points to -34.
Consumers are tightening belts as the major purchase index lost four points to -20 while the savings index rose by nine to 30.
“These figures underline that consumers are losing confidence in the UK’s economic prospects,” said Neil Bellamy, Consumer Insights Director, NIQ GfK.
Is Sainsbury’s a Good Stock to Buy?
Turning to the UK-listed shares (GB:SBRY), analysts have a Strong Buy consensus rating on the stock, with six Buys and one Hold among the seven offering a price target in the last three months. The average SBRY price target of 309.14p implies over 21% upside potential.
