All of a sudden it seems a long time ago that Tesco boss Ken Murphy was revelling in announcing the supermarket’s “biggest ever Christmas”.
For the record, just 21 days have passed since the all-conquering supermarket giant delivered the news that sales were up 4% over Christmas, making Tesco the clear winner among the full-range food retailers over the vital festive season.
Today, though, it was left to Tesco’s UK CEO Matthew Barnes, the former Aldi boss, to break the bad news to the 400 staff at bakeries, head office and elsewhere across the business who will lose their jobs as part of what he said was a drive to “simplify” the operation.
Barnes blamed the “more competitive than ever” UK grocery market for the cuts, with Tesco making it clear that its priority is to keep a lid on prices and avoid inflation wherever it can.
Sadly, it was almost inevitable that with cost pressures growing, 2025 would feature the brutal rounds of supermarket redundancies that have become an all-too-familiar feature in recent years.
The fact that once more the biggest and most successful of the lot is joining in merely cements the depressing situation.
More job cuts to come
Last week, The Grocer revealed that Morrisons was axing around 200 of its head office human resources team as it embarks on a major cost-cutting drive, despite people apparently being at the heart of its turnaround strategy.
Today, its CEO Rami Baitiéh refused to rule out more to come, as he said Morrisons had pushed the accelerator on its plans to slash costs by tens of millions across its supply chain. Again, it was sad to see the gloss taken off an otherwise strong performance with Baitiéh revealing Morrisons’ best results for nearly four years today.
Yet he was up front about the stormy waters ahead and far more blunt than Tesco about where he thinks the blame lies.
The former Carrefour boss said October’s budget had landed Morrisons with £85m in National Insurance costs alone, adding that Labour’s tax hikes meant it had no option but to slash costs. Morrisons has not been helped either by the Blue Yonder ransomware attack in November – from which its boss admits it has not yet fully bounced back.
But it is clear that he sees Rachel Reeves as more of a problem than having to rebuild a warehouse ordering system from scratch – which says a lot about the state of retailer relations with ministers right now.
As for staff, Tesco, Morrisons and other grocers such as Sainsbury’s, which is also making huge job cuts, need to tread carefully.
Masters of their craft like Barnes and Baitiéh will know all too well that poor morale can undermine even the clearest of strategies. So let’s hope Tesco can find jobs elsewhere for those staff impacted and that future announcements from Bradford stop short of any major cull.
Tesco and Morrisons have achieved their recent success by getting the basics right – and that must include supporting those in the frontline.
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