Tesco's rivals say they won't cut corners on staff levels either

After Tesco boss Dave Lewis said the retailer would not be cutting any corners in the new year in terms of reducing shop floor staffing levels to boost end-of-year profitability, his rivals were at pains to distance themselves from such tactics.

A Sainsbury’s spokeswoman said hours for its staff would not change after Christmas as they were all contracted.

An Asda spokesman pointed out it would not make sense for it to make any such cuts in the fourth quarter as its end-of-year is this month. “We always make sure we’ve got enough colleagues in stores for how our customers are shopping,” he added.

Meanwhile, Morrisons said the way it planned labour in stores was commercially sensitive and that it was continuing to run its retail improvement ­programme, to drive efficiency and retail improvement across the business.

However, members of an online Morrisons staff forum appeared to suggest hours were likely to be a contentious issue in the new year. “Heard today that my store has to lose lots of hours in January. Yep I know we lose hours every year at this time but this year seems even more drastic,” said one poster.

Another added: “The company are way behind on targets and therefore more cost-cutting being put in place from now to shore up our figures and invest in more deeper price cuts.”

On Tuesday (9 December), Tesco issued a fresh profit warning, admitting profits for the year to February 2015 would not exceed £1.4bn compared with City expectations of between £1.8bn and £2.2bn.

Lewis said a major factor in this was his decision to reject the sort of measures it might have used in the past, including cutting staffing in January and February to prop up profits. He also said recent investment to improve availability and competitive pricing for its top 1,000 lines would continue.

“There are certain things you can do to run the machine slightly leaner in the last part of the year,” said Lewis. “When I look at that and I see it as a contributor to the profit of the business in the fourth quarter, we’ve taken the decision that those things have the potential to impact on the quality and the service we offer and that’s not in the medium and long-term benefit of the business.”

Meanwhile Tesco also said it was entering a “new relationship” with suppliers. Lewis said he had started to meet key suppliers to discuss the new long-term strategy.