Sainsbury's to shut 200 in-store cafes

J Sainsbury is to cut around 2,000 jobs as part of a wide-reaching shake-up of its cafes and hot food counters.

The supermarket chain said it planned to close 200 of its 267 cafes in the coming weeks, as well as shutting hot food counters in 34 stores, and simplifying the way it runs bakeries in 54 of its shops.

A total of around 2,000 jobs are likely to be affected.

Sainsbury’s said it would now enter consultation with affected workers with the aim of deploying them to other areas of stores.

At the same time, the grocer intends to open 30 food halls over the next year in partnership with the Boparan Restaurant Group. The move follows a successful trial with Boparan of The Restaurant Hub at the Sainsbury’s at Selly Oak, Birmingham, which sells eat-in, takeaway and home delivery food and drink from various brands, including Ed’s Diner and Gourmet Burger.

It will also open a further 30 Starbucks coffee shops in-store over the next 12 months, bringing the total up to 60.

Simon Roberts, Sainsbury’s chief executive, said: "The Restaurant Hub means [customers] can have breakfast, lunch or dinner in store, or take a hot meal home with them. Through our trials with Boparan and Starbucks, we have learnt that we can offer customers a much better eat-in and takeaway experience working with partners

"As we go through this period of transition, we have taken the difficult decision to close 200 of our cafes next month. We have spoken to all colleagues affected by these changes, and are absolutely committed to supporting them in any way we can during this uncertain time.

"But we must keep adapting our business to make sure we are offering customers the best possible food and drink at affordable prices."

Satnam Leihal, chief executive of Boparan, said: "Customers are returning week in, week out, thanks to great quality food, brilliant service and unrivalled choice, and we now look forward to rolling out our innovative Restaurant Hub across the country."

Alex Rayner, general manager of Starbucks UK, said: "Covid-19 accelerated customer trends towards convenience and as a result we’ve continued to increase investment in new formats and digital channels."

Financial terms of the Boparan and Starbucks partnerships have not been disclosed.

Sainsbury’s, which has over 600 supermarkets and 800 convenience stores, employs a total of around 189,000 people.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "These are yet more slimline measures Sainsbury’s has brought in on a supermarket sweep to cut costs across the business and take on the discounters Lidl and Aldi. It’s sliding down the value chain, and investing heavily in reducing prices and this is the latest in a raft of recent restructuring moves by the retailer as it seeks to keep a lid on rising costs. Just over a year ago it began closing its delicatessen counters, to reduce food waste and make stores simpler to run.

"The retailer is under pressure to trim workforce costs and logistics, problems which have been compounded by supply chain issues and labour shortages. The in-store dining concept at Sainsbury’s hasn’t completely fallen out of favour though with the expansion of the partnership with Boparan Restaurant Group which runs Gourmet Burger Kitchen and Ed’s Diner outlets. The chain is clearly hoping customers will taste the difference via these tie-ups with known chicken and burger brands, while its own staff costs are taken out of the equation and it can concentrate spend on the business of filling trollies and virtual baskets instead."