Sainsbury’s is planning a major revamp of its stores as it steps up the fight to win back shoppers from rivals Aldi and Lidl.
The country’s second biggest supermarket, which also owns Argos, will cut costs by £1bn over three years to help drive down prices.
Boss Simon Roberts did not rule out redundancies and pledged to put “food back at the heart of Sainsbury’s”.
It also promised better returns for investors and will launch a £200m 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 that stores have more space to sell food and less space for clothing and general merchandise.
Review: Sainsbury’s boss Simon Roberts (pictured) said the supermarket chain will cut costs by £1bn over three years so it can lower prices.
Under its new ‘Next Level Sainsbury’s’ plan, it will close more standalone Argos stores and instead open more Argos click and collect points in supermarkets to cut 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And it said it will save money by replacing slow, outdated technology with modern systems, including more automated robots in warehouses.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 if they might happen, Roberts said: “We can’t afford to suffer from inefficiencies.”
He said these savings will be used to lower prices in the hopes of making it “the first food choice for more people.”
Roberts said the grocer had attracted more shoppers away from Aldi and Lidl in recent months, including during a bumper Christmas.
Sales rose 8.1 percent in the 12 weeks to January 21, data from market analysis firm Kantar showed.
Sainsbury’s has a market share of 15.7 per cent, up 0.3 percentage points on last year.
It hopes to take advantage of this by selling more fresh foods and expanding aisles to stock more popular products.
Currently, only 15 per cent of Sainsbury’s supermarkets carry their full range.
And it will open about 75 convenience stores to attract more shoppers looking for takeout.
The growing popularity of German discounters Aldi and Lidly prompted Sainsbury’s to launch its Nectar Prices loyalty program last April. Customers receive lower prices if they belong to it.
More than 550 items are now being compared to Aldi in a price-matching scheme.
But there have been suggestions around town that Sainsbury’s should sell Argos to focus on its grocery division.