This week's retail news 'you may have missed'....
At mdj2, we’re passionate about retail and always looking to share our news, views, and insights. With so much information out there, we wanted to share just a small selection of retail news headlines from last week that we found interesting…?
?Sainsbury's to cut 3,000 jobs and shut cafés.
Sainsbury's has announced it will cut 3,000 jobs as it shuts down its remaining cafés and closes its patisserie and pizza counters.
The supermarket says the move will "simplify the business", adding that most Sainsbury's shoppers "do not use the cafés regularly".
Sainsbury's also plans to make a 20% reduction in senior management roles, saying the business faces a "particularly challenging cost environment".
Although Sainsbury's was already in the midst of a plan to save ￡1bn over the next few years, the BBC understands the rise in employer's National Insurance contributions set out in the Budget has also been a factor in the latest restructuring plan.
Rival Morrisons has also announced plans to axe 201office-based jobs.
A spokesperson for the supermarket said it was planning to "remove the roles of Regional People Manager, Store People Manager and Case Specialist from our structure, meaning colleagues in these roles are being placed at risk of redundancy".
Food counters?
In response to Sainsbury's announcement, Downing Street said: "As we said at the Budget, difficult decisions were needed to restore economic stability, and put the public finances back on to a stable footing."
Sainsbury's?recently reported strong Christmas trading?and said it expected annual profits to surpass ￡1bn.
But when he unveiled the trading figures earlier this month, chief executive Simon Roberts repeated his warning about the impact of measures announced by Chancellor Rachel Reeves and said there would be "tough choices".
Sainsbury's has said the rise in employer's NI contributions will cost it ￡140m from April.
The industry trade body, the British Retail Consortium, reckons higher costs for retailers will impact investment, jobs and lead to higher prices.
Shadow business secretary Andrew Griffith said the cuts by Sainsbury's were "devastating but no surprise", adding that the government should "undo its jobs tax".
In the Budget, Reeves announced that the rate of National Insurance paid by employers would rise to 15% in April while the salary threshold at which payments begin would drop from ￡9,100 to ￡5,000.
The government expects the measure to raise ￡20bn.
Early last year, the previous Conservative government twice cut National Insurance payments made by workers, reducing the rate by 4% in total at a cost of billions of pounds.
'First of many'
This is the second wave of major job cuts for Sainsbury's in just over a year. Last February, it announced 1,500 roles would go.?
The supermarket group, which owns Argos and Habitat,?will shut down its remaining 61 cafés and, as well as pizza and patisserie, will also dispense with its hot food counters.
Instead, it will make "the most popular items available in the aisle".?
Jobs will go from Sainsbury's head office as part of an update of its divisions and management "to drive faster decision-making and bring costs down".?
A fortnight ago, Sainsbury's said it would raise its average hourly pay by 5% to ￡12.60. But the wage increase will be introduced in two phases "to help manage a particularly tough cost-inflation environment".
The Unite union said the job cuts were "a blatant example of profiteering on the backs of workers".
Paul Travers, Unite's officer for food, said the supermarket should be "ashamed" for cutting jobs while making millions of pounds in profit.
But Catherine Shuttleworth, chief executive at retail marketing firm Savvy, said Sainsbury's cuts are "likely to be the first of many" for the retail industry.
"As expected, services to shoppers will be cut as retailers wrestle with the increased costs of labour as a result of the Budget," Ms Shuttleworth said.
"But what's clear from Sainsbury's statement is that retail organisations will have to make difficult decisions at all levels of the organisation both in stores and behind the scenes in head office too."
?Homebase relaunches website.
Homebase has relaunched its website as it looks to provide customers with a one-stop shop for all home improvement needs.
The move follows?CDS Superstores’ acquisition of the Homebase brand?and 70 shops late last year when the retailer collapsed into administration.
The redesigned site aims to offer an upgraded online shopping experience with an enhanced browsing experience and improved functionality.
Homebase.co.uk features a range of household brands and products across the decorating, DIY and gardening categories, with up to 10,000 additional items available.
The website also offers CDS’ Click & Collect service at over 200 The Range and Wilko store collection points where customers can pick up online purchases in as little as 60 minutes.
Alex Simpkin, group chief executive at CDS,?said:?“We’re excited to announce the relaunch of?www.homebase.co.uk, offering customers nationwide an upgraded shopping experience via a diverse range of products for all their home and garden projects.
“Our aim is to preserve the best of Homebase’s heritage while introducing the broader product range, value, and quality to our customers.
“The relaunch is just the beginning, we’re committed to continually refining the user’s experience through regular updates as part of an exciting programme of digital initiatives, designed to enhance customer engagement.”
?Morrisons joins Sainsbury’s in slashing hundreds of jobs to trim costs.
Morrisons is set to cut over 200 jobs from its retail people team as part of a significant cost-saving initiative, becoming the latest supermarket to announce such measures as it navigates the challenging economic landscape of 2025.
The move follows CEO Rami Baitiéh’s comments last month about?the “avalanche of costs” businesses will face?after the government’s October Budget.
The impacted roles, which include positions in customer experience, employee engagement, recruitment, and payroll, are part of the supermarket’s restructuring efforts,?The Grocer?reported.
A spokesperson for the supermarket told the title: “We have recently carried out a review of our People structure to ensure we are offering our stores and sites a timely and consistent service.
“We are therefore proposing to remove the roles of regional people manager, store people manager and case specialist from our structure, meaning colleagues in these roles are being placed at risk of redundancy.”
“The new structure will consist of a number of new central roles to support our supermarkets directly along with central HR support and additional employee relations roles. Before any final decisions are taken, we will undertake a minimum 45-day consultation process.”
It comes as Sainsbury’s revealed on Thursday that it would be?axing 3,000 roles and closing the remainder of its in-store cafés?as part of CEO Simon Robert’s ￡1bn cost saving plans.
Analysts have predicted that further job cuts could be on the horizon as supermarkets look to address mounting economic challenges and concerns about rising food price inflation.
Earlier this month, Asda confirmed it would be cutting 13 regional managers to streamline operations and reduce duplication. Meanwhile, Morrisons, which garnered praise for its turnaround under CEO Baitiéh,?saw marginal sales growth?of just 0.4% over Christmas, according to the latest Kantar figures.
Baitiéh, who?joined Morrisons from Carrefour in 2023, is expected to release the supermarket’s fourth quarter and full-year results next week, with a focus on improving availability and service. However, the retailer is under pressure to maintain its competitive edge against the likes of grocery giant Tesco and the growing discounter market.
The news of the job cuts was met with widespread support for the impacted staff on social media.
One former employee shared their thoughts on LinkedIn, saying, “I was really sad to read via LinkedIn the decision that Morrisons has made today with their people teams.
“I think Morrisons has underestimated just how much the people teams contributed to the business, especially during those Covid years when People Managers stepped up and delivered a recruitment campaign never ever witnessed.”
Another former team member said: “I wish all my former colleagues the very best, this will be a massive loss to the business.”
?Iceland throws 600-jobs lifeline to Sainsbury’s and Morrisons workers.
Iceland is inviting those at risk of redundancy at Sainsbury’s and Morrisons to apply for one of the 600 roles its currently hiring for.
The?frozen food specialist?has a?mixture of full- and part-time positions available, spanning retail staff, home delivery drivers, and management roles at the company’s Head Office in Deeside, North Wales.
It comes as Sainsbury’s revealed yesterday (23 January) that it was?slashing 3,000 jobs?as part of a drive to simplify its business and address rising costs.
The supermarket giant is closing its remaining cafés, hot food counters, patisserie, and pizza counters, and reduce senior management roles by an estimated 20%.
Sainsbury’s is not alone in mass job cuts, with?Morrisons cutting over 200 jobs?from its retail people team including positions in customer experience, employee engagement, recruitment, and payroll.
An Iceland spokesperson said: “While many in the retail sector are facing tough decisions, we’re proud to be creating opportunities and expanding our team as we grow across the UK.
“These roles reflect our ongoing commitment to investing in our business, our people, and doing the right thing by all those who make Iceland what it is today. We invite experienced retail staff and talented managers to come and join our team.”
?Lakeland owner puts chain up for sale ahead of tax rises.
The owners of Lakeland are exploring a possible sale of the kitchenware’s chain after more than 60 years, ahead of tax rises in April.
The retailer, which is controlled by the three sons of founder Alan Rayner, is thought to be working with advisors at Teneo to scout prospective buyers, Sky News?reported.
PwC is also understood to have been hired to advise Lakeland’s principal lender HSBC.
The retailer, which employs around 1000 people, operates 59 stores across the UK and is headquartered in Windemere.
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A spokesperson from Lakeland told the publication: “Lakeland is one of the UK’s most loved and trusted brands.
“In response to the challenging retail environment, we are considering a number of options to ensure a sustainable and long-term capital structure, which builds on our sixty-year heritage as one of the UK’s most innovative homeware retailers.”
The retailer’s accounts filed at Companies House for 2023 warned that it entered that year “facing the most challenging economic conditions for several decades with high inflation leading to falls in demand for many traditional categories”.
Lakeland’s auditors warned of “material uncertainty… [about] the company’s ability to continue as a going concern” after sales for the year were flat at ￡153m.
?WH Smith in secret talks to sell historic high street arm.
WH Smith is in secret talks to sell its entire high street business in Britain more than 230 years after it opened its first shop in central London.
Sky News can exclusively reveal that the listed retail group, which has a market capitalisation of almost ￡1.5bn, has been in negotiations with a number of prospective buyers of the division for several weeks.
WH Smith will confirm the plan to the London Stock Exchange on Monday morning.
The company's high street arm comprises roughly 500 stores, employing about 5,000 people across the country.
It is currently part of the same group as WH Smith's faster-growing, more profitable travel retail business which operates from airports, train stations and hospitals.
The travel retail business comprises 600 shops in the UK, roughly half of a global operation numbering about 1,200 travel retail outlets.
Bankers at Greenhill have been appointed to run the sale process for the high street business, with a deal expected in the coming months.
The identities of the likely buyers were unclear on Saturday.
Run by Carl Cowling, chief executive, the disposal of its high street arm and repositioning as a pure-play travel retail company is likely to be welcomed by investors, one analyst said this weekend.
WH Smith's high street division, which recorded flat operating profit of ￡32m last year, still largely sells greeting cards, books and stationery, while the travel arm has a wider offering of food and drink, and technology products.
The travel business now accounts for 75% of the company's revenue, and 85% of profits, reflecting its higher margins.
It is growing particularly quickly in the US market.
The company's retail business in hospitals is also growing rapidly, with 145 stores in 100 hospitals across the UK, and scope for openings in 200 further sites, it said in its last set of results in November.
News of the potential sale represents a watershed moment in the history of the British high street.
WHSmith's first store was opened in 1792 by Henry Walton Smith and his wife Anna in Little Grosvenor Street, London.
The company opened the first ever travel retail store in Euston station in 1848.
?Robot packers and AI cameras: UK retail embraces automation to cut staff costs.
Electronic shelf labels, returns machines, robot bag packers and yet more self-service tills – just some of the many technologies that UK retailers are embracing as they try to solve the problem of rising labour costs.
Investment in automation was a constant drumbeat amid the flurry of festive trading updates from big retailers in the past few weeks, as they face higher staffing bills from April after the rise in?the national minimum wage?and?employers’ national insurance contributions (NICs).
The investments could improve productivity –?a key government aim?– in an industry long reliant on cheap labour. However, they will also replace entry-level jobs and reduce the number of roles in a sector that is the UK’s biggest employer.
When the British Retail Consortium asked leading retailers’ finance directors how they would be responding to the impending increase in employers’ NICs, almost a third said they would be using more automation, although this sat behind raising prices, cutting head office jobs and reducing working hours.
So what innovations are they considering and whose jobs could be affected?
Electronic shelf price labels
Already prevalent in some other countries, electronic shelf labels could blink into action across UK high streets in 2025. One retail boss told the Guardian the NICs surge in labour costs had suddenly made the switch economically viable.
Prices can be changed at the press of a button, slashing staff hours spent removing and replacing hundreds of small paper labels. The electricals chain Currys plans to put electronic pricing into 100 of its 300 UK stores by the end of this year, after trials in its Nordic outlets, while supermarket groups Sainsbury’s and the Co-op are also testing it out.
Self-service
Shopper-operated tills have become ubiquitous in supermarkets but expect to see more in fashion and homewares outlets this year.
Primark has them in 41 UK stores with plans to extend to at least five more this spring, while Next is piloting them in one branch.
The Japanese fashion chain Uniqlo and Zara owner Inditex have led the way with technology that can ring up an entire basket of goods without the need for customers to scan them in using radio frequency tags. Marks & Spencer is experimenting with this approach for customers putting through non-food items.
Grocery stores are innovating too. The Co-op is testing a hybrid till that can either be self-service or staff-operated, while several supermarkets have added large self-checkouts suitable for handling a full trolley.
Self-scan systems such as Sainsbury’s SmartShop or Tesco’s Scan as you Shop, where the shopper rings up prices as they go using a handheld device or smartphone app, are also on the rise. Sainsbury’s said 30% of the groceries it sold over the peak festive period were processed via SmartShop, leading to “cost savings and higher speed of checkout”.
Automated returns machines are also popping up, enabling shoppers to drop off unwanted items with the swipe of a QR code. John Lewis is testing them in three Waitrose stores.
However, the idea of entirely un-staffed shops is under question.?Amazon’s “just walk out” stores, where shoppers sign in via an app and technology automatically monitors their purchases and charges them, have not proved a roaring success. The retailer has 21 sites in the UK, after several closed in 2023 and 2024, although one did open in north London in November. Tesco has just four of?its GetGo self-service shops, the first of which opened in 2021, while Aldi just has one such UK outlet.
Warehouse automation and robots
Retailers have been gradually stepping up automation in warehouses for years, but labour costs are accelerating the trend.
Sales of assembly line robots to food and drink, logistics and consumer goods companies rose 31% in the first nine months of last year, according to trade body Automate UK. The figures do not include autonomous mobile robots, which move about completing tasks without a human operator and are becoming increasingly prevalent.
Amazon and John Lewis, for example, use autonomous robots to shift products around their warehouses, bringing them to humans who pack the goods. Ocado’s entire business model is based on the use of robot-run warehouses, but it has begun expanding their use beyond picking items from crates towards?packing shoppers’ bags and filling vans with goods.
One Irish retailer recently introduced robots that tour the store monitoring out-of-stock products and pricing errors, while a US retailer used the same tech to increase on-shelf availability to 98.5%, according to the Institute of Grocery Distribution (IGD).
Artificial intelligence
The IGD also names AI-enabled cameras that check for gaps on shelves in real time and monitor how shoppers interact with products as one of the key technologies for improving store operations this year. Last year Morrisons added cameras to its supermarket shelves that can reorder stock where necessary.
Retailers also hope to cut waste and improve marketing efforts by using AI to analyse vast swathes of data or handle simple and repetitive tasks.
Sainsbury’s has deployed AI-enabled?forecasting tools?to help it put the right amount of products on shelves as part of a ￡1bn cost-saving initiative. Waitrose uses the technology to schedule the right labour for its deliveries from stores and analyse food trends for product development, while M&S is using it to write online product descriptions and?advise shoppers on outfit choices?based on their body shape and style preferences.
Tesco is using AI for buying decisions and to optimise routes for delivery drivers. The supermarket’s chief executive, Ken Murphy, said interactions with customers would be “truly powered and driven by AI in almost every facet of the business”.
He suggested it could be used to analyse shoppers’ loyalty card data and give them “inspiration and ideas that are relevant to them and their family,” including how to save money or look after their health by not overbuying (or presumably buying) certain items.
?Amazon to launch ‘Prime Air’ delivery drone service in the UK later this year.
Amazon is planning to launch Britain’s first drone delivery service in Darlington as it looks for new ways to send customers their orders.
The?retail giant?said it would seek permission to send drones from its warehouse on the outskirts of the town but did not specify when it hopes to start the trial.
The ecommerce giant said customers will be able to opt into drone delivery, which could mean packages arrive in as little as 15 minutes, and those not interested will have their orders delivered as usual.
Amazon first started testing drone flights in Cambridgeshire almost a decade ago, although the programme faced multiple setbacks and was eventually moved to the US.
The retailer recently suspended flights of its new MK30 drones in Arizona and Texas after two of its drones crashed during light rain in its testing facility.
Amazon has since rolled out software changes that it said would allow the aircraft to better deal with wet weather. It said the crashes were not the main reason for the updates.
The online giant has been searching for appropriate launch sites in the UK for months and has chosen Darlington, which has a population of just over 100,000, after considering factors such as airspace requirements, local weather and its existing warehouse operations.
Amazon said: “We are ready and excited to make drone delivery a reality for our UK customers.
“We have built safe and reliable drone delivery services elsewhere in the world in close partnership with regulators and the communities we serve, and we are working to do the same in the UK.
“We are announcing that Prime Air is taking steps to start planning for initial flights from our fulfilment centre in Darlington.”
The retailer said it will seek planning permission to refit its local fulfilment centre with its flight operations facilities and apply for authorisation from the Civil Aviation Authority (CAA) to fly a drone in the airspace.
“Once those agreements are in place, we will be able to begin hiring team members to launch drone delivery,” it added.
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