Sainsbury’s is planning a major overhaul of its stores as it steps up the fight to win back shoppers from rivals Aldi and Lidl.
The country’s second- biggest grocer, which also owns Argos, will slash costs by £1billion over three years so that it can lower prices.
Boss Simon Roberts did not rule out redundancies as he pledged to place ‘food back at the heart of Sainsbury’s’.
It also promised better returns for investors and will launch a £200million share buyback scheme over the next financial year. But shares fell 6.1 per cent, or 16.7p, to 258.9p.
Sainsbury’s wants to transform its supermarkets so stores have more space to sell groceries and less for clothes and general merchandise.
Overhaul: Sainsbury’s boss Simon Roberts (pictured) said the supermarket chain will slash costs by £1bn over three years so that it can lower prices
Under its new ‘Next Level Sainsbury’s’ blueprint, it will close more stand-alone Argos stores and instead open more Argos click-and-collect points in supermarkets to trim costs.
And it said it will save money by replacing slow, outdated technology with modern systems, including more automated robots in warehouses.
No job cuts were announced yesterday but, when asked whether they could come, Roberts said: ‘We can’t afford to be carrying any inefficiencies.’
He said these savings will be used to lower prices in the hope it willl be ‘the first choice for food for more people’.
Roberts said that the grocer had attracted more shoppers away from Aldi and Lidl in recent months, including over a bumper Christmas.
Sales increased 8.1 per cent over the 12 weeks to January 21, data from the market insights firm Kantar showed.
Sainsbury’s has a 15.7 per cent slice of the market, up 0.3 percentage points on last year.
It hopes to build on this by selling more fresh food and expanding aisles so it can stock more popular products.
Currently, only 15 per cent of Sainsbury’s supermarkets offer its full range.
And it is going to open around 75 convenience stores to attract more shoppers who are looking for food on the go.
The growing popularity of the German discounters Aldi and Lidly prompted Sainsbury’s to launch its Nectar Prices loyalty scheme last April. Customers receive lower prices if they belong to it.
Now, more than 550 items are benchmarked against Aldi in a price match scheme.
But there have been suggestions in the City that Sainsbury’s should sell Argos to focus on its grocery arm.