Thousands face axe at Sainsbury

SAINSBURY has been sounding out investors on a plan to cull up to 5,000 senior store staff to bring the supermarket chain into line with rivals Asda and Tesco.

Up to half the senior manager jobs at Sainsbury's 535 stores would be at risk under the plan. But the cost savings would be used to recruit up to 10,000 junior staff for such roles as checkout clerks and shelf stackers.

One investor was told that Sainsbury was 'looking to de-layer management in store' but would end up employing more staff than it was slashing. It is believed the plan has yet to be approved.

Sainsbury, Britain's second-biggest grocer, employs about 32 senior managers in each of its stores compared with about 20 at Tesco and Asda. They each earn an average of £25,000 a year.

The company, which holds its annual meeting on Wednesday, is in the early stages of a review. A spokeswoman agreed that the chain was 'always looking at ways of making parts of the business more effective', but she denied that there were current plans to make staff redundant.

Sainsbury, which has a workforce of 145,000, announced plans last month to axe 1,000 jobs by 2005 and generate annual savings of £20m. That review, which Sainsbury said was about 'streamlining' rather than saving money, covers employees at its head office and in supply chain and buying functions rather than instore. It is part of the three-year recovery programme put in place last year by chief executive Sir Peter Davis. He has already warned that 2003 will be the most intensive period in the business transformation.

Sainsbury is facing fierce competition from market leader Tesco while Asda, backed by US retail giant Wal-Mart, is snapping at its heels to take over as Britain's number two supermarket.

Latest figures from research firm Taylor Nelson Sofres show Sainsbury's market share is 16.8%, down 1% on last year. In contrast, Asda now has 16.3% of supermarket business.