Row blights Sainsbury's triumph

SAINSBURY'S euphoria that it is taking customers from rival supermarket Tesco for the first time in seven years has been overshadowed by a row over its treatment of 100 store managers.

The group, which lifted third-quarter sales by 6.4%, has given the managers a 48-hour ultimatum: submit to a performance assessment or resign with a severance package of £15,000-60,000. Some refused and are on 'gardening leave'. About 75 have banded together to explore legal action.

They claim the 'assessment' is to justify their sacking or demotion. 'I am not sure all 100 were beyond reproach, but we are feeling disappointed and betrayed,' said one.

The group's chief executive Sir Peter Davis played down weekend reports that the 100 - one fifth of its store managers - were about to lose their jobs. 'A hundred managers who need extra help are being assessed and receiving coaching,' he said. 'Some will move to smaller stores and some will take early retirement, but it is a wild exaggeration to say 100 will be made redundant.'

He added: 'We are all having to raise our game. People who are performing less well are being asked to spend six to eight weeks when we test and train them. If you put pressure on performance, you always get one or two people who are not happy.

'All of us are assessed regularly - even I am. Life isn't fair. This is a highly-competitive culture'

Lke-for-like-grocery sales rose 6.4% for the 12 weeks to 5 January. Falling petrol prices held back total sales growth to 5%. The only dull spot was US offshoot Shaws, up 1.6% like-for like. Davis said: 'This year, it's about getting into our stride.' Store refurbishing is a three-year task, but 'we are on track for a sustainable recovery'.

Nick Bubb at SG Securities said Sainsbury's now has the 'hard yards' ahead of it, but was confident Davis could deliver. The shares fell 8p to 364 1/2p.