Britain’s biggest retailer, Tesco, has announced it is planning to axe 9,000 jobs as it faces increasing competition from cut price rivals.
Most of the job losses will come from fresh food counters over 90 stores and the head office will also see staff losses. The union says they are shocked at this latest round of job cuts, but Tesco says they have no choice as they are still struggling to turn the supermarket giants fortunes around.
Tesco said to the BBC: “Not only are customers shopping in different ways, but we know that they have less time available to shop too, which means they are using our counters less frequently. We will be making changes to the counters in our large stores to ensure that we have the right offers for customers”.
Tesco says nine thousand workers are likely to be impacted and 90 stores will close the fresh food counters, such as fishmongers, butchery and deli. Some remainder counter services will only open at peak times and the Tesco head offices will become ‘simpler and leaner’.
Tesco has a 4 year plan to cut £1.4 billion in operating costs. Tesco is blaming the competition from Aldi and Lidl both have lower overheads and offer the same items at much lower prices. Tesco says that about half of the workers affected will be re-deployed in other areas.
The news comes after some of the largest supermarkets pledge to slash prices. Morrisons said it would cut prices by an average of 20% on 935 products, including tinned tomatoes, cereals and multivitamins. Sainsbury’s have also cut prices across a range of products and Waitrose has some discounts on offer, some with prices down by more than 30% on a range of goods.
Andy Atkinson from Morrison’s spoke to the BBC and said: “We’re listening to customers who are telling us that their budgets will be stretched in January, so we are cutting every penny we can on the essentials.”
It seems the supermarkets are taking notice of what customers want and recognises the biggest threat to UK supermarkets remains the German Discounters. Figures realised by Aldi, showed sales rose by 10% over the Christmas period and reached a record of almost £1 billion. Aldi currently has 827 stores and plans to continue growing with an expected 1,200 stores nationwide by 2025.