Tesco axes manager roles, closes deli counters to cut costs

(Jan 31): Tesco Plc is eliminating hundreds of manager roles across its stores and closing all remaining food counters and hot delis as the UK’s biggest supermarket operator seeks to cut costs.

The grocer is introducing shift leader roles into its larger stores, allowing it to cull 1,750 other management positions. Tesco said Tuesday it will also shut its food counters and hot delis from Feb 26 as shopper interest wanes, with most consumers preferring to buy packaged products in the aisles.

At a more local level, the supermarket chain is planning to close eight pharmacies, move overnight roles to daytime in some stores and reduce hours in some of its post offices. Tesco is also cutting some roles in its head office in Welwyn and closing a maintenance base in Milton Keynes. All those measures will impact about 350 employees, who will be offered alternative roles.

The fresh round of job cuts comes as supermarkets’ margins are under pressure from rising inflation and the effort to keep prices down to protect market share. British shoppers are increasingly opting to visit the German discounters Aldi and Lidl which have a more simplified, budget offering.

Last week Asda, Britain’s third-biggest grocer, said it’s planning measures across its stores to save costs. The chain plans to cut night shifts in favour of staff restocking shelves during late evening or daylight hours. The company is also reducing hours for its post offices and closing a small number of pharmacies.

J Sainsbury Plc is losing its drug counters too as LloydsPharmacy has decided to close in 237 stores.

Tesco is attempting to keep prices down and raise employee pay as the worst UK inflation in four decades weighs on the business. The chain expects retail adjusted operating profit to fall slightly this year to between £2.4 billion (US$3 billion) and £2.5 billion.