More than 1,400 roles within Sainsbury’s Argos distribution network are at risk as part of a £90m restructuring structuring plans.
In what is a consolidation of its general merchandise supply chain over the next three years, Sainsbury’s will shutter its Basildon distribution centre and a depot at Heywood, Greater Manchester. Both sites serve Argos and will close by 2026. At the same time, it will make a “major investment” into automation and modernisation at a third depot in Daventry, though it said it didn’t expect the number of roles at the site to be affected “at this stage”.
The supermarket opened consultation with affected employees and those working for third-party distribution partners on Tuesday. It said it would offer those affected the opportunity to explore roles elsewhere at Sainsbury’s or Argos.
“As with any major change to our business, we have not taken the difficult decision to start this consultation lightly,” said Sainsbury’s CEO Simon Roberts. “As part of our plan to create a simpler business, we previously set out our intention to integrate our Argos and Sainsbury’s logistics networks.
“We understand that this will be an unsettling time for affected colleagues, and we will support them however we can throughout this process. We will be consulting closely with unions and colleagues as we look to streamline the number of sites in our general merchandise logistics network.”
Sainsbury’s said the consolidation of its five existing Sainsbury’s and Argos depots into three would create a simpler network and ”significantly improve availability, reduce stock and enable faster customer deliveries”.
The announcement comes amid a wider reshuffle of the supermarket’s property portfolio, including plans to close its three remaining showrooms for its Habitat homeware brand, which will affect a ”small number” of colleagues. Sainsbury’s is set to launch a new digital showroom in their place.
Its Milton Keynes office will also close this year, with no jobs affected. Sainsbury’s said that only 11% of desk space in the office had been regularly used since the pandemic, and that closing the site would enable the business to cut its operating costs.
Unite, the union that represents Argos distribution centre workers, as well as affected HGV drivers employed by Wincanton, said that there was “no economic justification” for the job losses.
“Management at Argos/Sainsbury’s has yet to provide any form of business case for the loss of these jobs. Unite will be fighting to preserve every job and will put forward an alternative business case to the company to preserve employment at these two sites,” said Unite national officer Matt Draper.
The closures represent the latest stage of Sainsbury’s ‘Save to Invest’ strategy, announced in 2020, aimed at making the business more efficient, by reducing costs and improving its supply chain.
Streamlining Argos – which Sainsbury’s acquired in 2016 – has been a significant part of that focus. Over the past few years Sainsbury’s has closed hundreds of Argos stores in place of in-store click & collect points. It’s also been expanding its network of local fulfilment centres, with plans to open two new local ones in the coming weeks.
The progress was reflected in Sainsbury’s “record” Christmas sales results in January. Argos’s year-on-year sales were up 7.1% in the six weeks to Christmas 2022, and 4.5% for the quarter overall. However, Roberts conceded that Royal Mail postal strikes had helped to improve those results.
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