3,000 jobs boost as Sainsbury's goes back to basics

Supermarket group Sainsbury’s is to create 3,000 in-store jobs in a bid to improve the availability of stock on its shelves, it was reported today.

The plan is expected to form a key part of a strategy by chief executive Justin King to halt the group’s slide down the retail pecking order.

He will unveil details of the overhaul on Tuesday, with the boost to numbers on the shop floor likely to come at the expense of 700 head office jobs.

Reports also said the outcome of a six-month review by Mr King will result in a new pricing structure and a move to improve the quality of own-label foods.

Shareholders, including the Sainsbury family, will feel the pain of the current woes as the company’s dividend is expected to be halved.

Mr King will use the catchline Getting the Basics Right to promote the changes and is expected to say that it will take three years to turn around the group.

In particular, he will look to address the product availability problems which have remained despite a £3bn (€4.3bn), three-year overhaul of the company’s distribution and IT system by previous boss Sir Peter Davis.

One Sainsbury’s executive is quoted in the Sunday Telegraph as saying that stock arrived in stores but then often failed to make the shelves.

The source said: “When we looked into it, we discovered that the new system was dumping goods unsorted at the back of stores. We didn’t have the manpower in the stores to sort it. So the stuff stayed in the boxes and rotted.”

Some analysts expect Sainsbury’s to make pre-tax profits of little more than £200m (€289.3m) this year, a tenth of the £2bn (€2.9bn) forecast for rival Tesco.

And a series of one-off costs associated with the overhaul could even force the company into the red, reports said today.

Sainsbury’s has already warned on profits three times this year and indicated last week that first-half profits would be down by nearly two-thirds.

It is also seen as a possible takeover candidate with potential bidders for the UK’s third largest supermarket group believed to include US retailer Target.