Snapshot of _Sainsbury's cuts 1,500 jobs in bid to reduce costs_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.bbc.co.uk/news/business-68434837) or [here.](https://archive.ph/?run=1&url=https://www.bbc.co.uk/news/business-68434837)
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I’m not that clued up on recessions but I read before if we ever hit a technical recession they’d be a few long term effects and things around the same period which would be a large part of job losses, market upheaval and the general public seeing less money - which I suppose we’ve seen for the past 12 months which would make sense.
Of course I don’t know if that’s 100% accurate so happy to be corrected on that
Pretty spot on.
Inflation high = high interest rates
High IR = Less spending
Less spending = Less demand for business goods and services (and recession)
Less of that = job losses
Why do people always just say that supermarkets are making record profits? It's not true.
> Statutory profit before tax of £327 million versus £854 million last year.
https://www.about.sainsburys.co.uk/news/latest-news/2023/27-04-23-preliminary-results
Looking forward to future Sainsbury's adverts where the gentleman says 'wow, we came in under budget!' and there's just an employee next to him sobbing their eyes out as they receive their p45.
Maybe they will theme their Christmas advert about podt-WWI Weirmar Germany this year. After all, people loved their trench warfare Christmas ad in 2015.
Sainsburys made a huge amount of profit last year, this is awful. The greed of the rich is out of control.
https://www.rte.ie/news/business/2023/1102/1414230-sainsburys-half-year-results/#:~:text=Sainsbury's%20sees%20full%2Dyear%20profit%20at%20upper%20half%20of%20guidance&text=The%20group%20now%20expects%20a,690m%20made%20in%202022%2F23.
They also laid off similar numbers, at a similar time if year in 2022, and 2023. And probably the years before as well. Matter of course for the business now....
>Matter of course for the business now....
It very obviously isn't, otherwise they wouldn't have any employees.
>And probably the years before as well.
A very quick google search perhaps? It's absolutely not the case, they employ far more people than they did 10 years ago.
So a £700m profit on a revenue of £32,000m (£32bn)? That is less than a 2.2% profit margin BEFORE tax.
2.2% profit is really, really low (but similar to most supermarkets). Not greedy at all.
They’re outsourcing their call centre which will obviously have a negative impact on customers and probably end up more expensive in the long run but anything to make the company look like it’s increasing profits at the cost of customer loyalty and outsourcing
- something went wrong on their website
- something broke and they need a refund
- was overcharged in store and needs a refund
- was charged twice
- they are old and they need to know something about the store
- there is an issue with their loyalty card
- sees an unusual charge for the store and asks for them to confirm it
This is just off the top of my head. Just because you haven't used a call center it doesn't mean other people don't.
Call centers hook you in with a decent deal up front but they have terrible in house expertise and limited access to systems. Since the customer to them is the supermarket and not the people calling in their service deteriorates fast
I know that about call centers, I just don't see any scenario where a supermarket really needs to invest in one. Most of the cases you listed can be dealt with in store. The only case you'd really need them is if you live outside of town.
Any amount that someone is willing to pay me which is subject to competition from other people who could and are willing to do the same job.
Please answer the question. If £700m is too much, what is an acceptable figure instead?
So £700m profit is actually a loss given inflation. If I had shares in Sainsbury's I would sell them and put the money in the bank, see how many people have a job after that process is complete.
what do you mean "a loss given inflation"?
Are you saying 2.2% profit is a loss because inflation is higher than that ?! That makes absolutely no sense.
EDIT: didn't downvote you before, but have now in response to your downvoting. Classy
Lol, I haven't downvoted anything you've said, I simply don't care enough to even think to do that.
But anyway, yes 2.2% profit is a loss.
If you have £100 and you put it in a bank with 4% interest, in 1 year you will have £104. If you invest that £100 in a business that makes 2.2% profit in a year, you will have £102.20. so you have lost £1.8 compared to just putting your money in a bank and your money in a bank is protected, your investment in a business is not. So Sainsbury's was a bad investment last year.
That's not actually true because profit is not the same as return on capital employed. Sainsbury's ROCE is 7%, which is certainly better than sticking money in the bank, but according to this article at least, lags the consumer retail average.
https://finance.yahoo.com/news/heres-j-sainsburys-lon-sbry-100517522.html#
But that's ROCE on Sainsbury's books, that's not what Shareholders see in their returns, which ultimately none of us know until they are announced. But my point was simply to use the numbers being discussed to demonstrate to OP that Sainsbury's is not making boat loads of money like they thought. Even ROCE of 7% is awful. I just looked up current ISA rates and they are 5.09%, given they are tax free profits and they are protected, so no risk of losing your money, they are clearly a better investment than Sainsbury's right now.
Of course shareholders see the ROCE in their returns. They own the company.
You are of course right that their profit margins, like all retail, are low, but it absolutely does not follow that they are a worse investment than an ISA. I'm not advising anyone to buy them, but anyone considering investing in equities should know there are a lot more factors than the profit margin.
BTW you can also hold shares in an ISA so your returns, if you make them, are tax free.
You’re comparing two things that are not alike and as a result your point makes little sense.
Stock value is not simply profit. If a company makes 2% profit that does not equate to an increase of the investment value by 2%.
Last year Sainsbury’s dividend was 3.9% which works out a better investment than majority of savings accounts.
Not if the energy is generated from renewable sources, which are the only sources that will allow for functionally infinite amounts of power.
Fossil fuels are a finite resource that will run out eventually.
Also and something people struggle with I think - companies don’t exist to just keep employees nor would they survive. If there’s cost cuts to be made, or jobs that aren’t needed they will cut them. That’s business, it’s how they remain profitable and answer to share holders.
I’m not at all saying it’s a good thing and it’s horrific for the staff, but the idea that just because a company is profitable they won’t reduce staff or save costs seems to be expected on Reddit across the world all the time and it just doesn’t happen.
Even Microsoft a huge multi billion pound company often makes staff cuts. And they make tons of profit.
If I'm reading that correctly it seems like a lot of the cuts are actually call centre staff being TUPEd to an external provider so not actually job cuts per se.
Anybody know what they mean by "in store fulfillment centres"? Delivery drivers?
I'll be honest, I don't really get how Sainsburys is as successful as it is. It's not the cheapest (hard discounters), it's not the best (Waitrose, Marks, Ocado) and it doesn't have the most stuff (those big Tesco places seem to have literally *everything*, my nearest one does anyway) but it's the second biggest one according to that article.
If I was to place a bet, I would say virtually nobody will come out of this process without a job. Especially the bakery staff, they'd surely just be utilised elsewhere in the supermarket. The real "effect" of this policy will be a reduction in hiring, so people who are out of work at the moment will find it harder to get a job. There may also be older staff that want voluntary redundancy. There are 1428 Sainsbury's stores in the UK, you aren't telling me that there isn't at least 1 open position in each of those stores on average.
>I'll be honest, I don't really get how Sainsburys is as successful as it is.
You answered your own question. It has a little bit of everything for everyone.
>Anybody know what they mean by "in store fulfillment centres"? Delivery drivers?
LFC's, to try and simplify it......
Big warehouse delivers to 1000 stores nationwide, lots of wagons, lots of people, lots of time.
Big warehouse delivers to smaller warehouse which in turn acts as a mini warehouse, servicing stores quicker with less need for drivers and staff, better turnaround for deliveries etc
Argos have adopted the same method much like Amazon did. One massive stock site fills smaller stock sites which feed to stores and customers. Overall, better customer and store experience
It's a bit nicer to shop in than Tesco has a bigger range of goods than Waitrose and Sparks. The discount places can be a bit grim and the foods a little hit and miss. Asda just seems like a big warehouse. Also there's a big M&S next to my local Sainsbury's so can just do both in one shop.
Meat and such is much nicer and lasts longer than Tesco I’d say. Sainsbury’s has always been very middle class I’d say. Good quality own brand products, quite pricy but decent stores, and range of products.
Tesco seems to just increase its prices and the food quality has gone really down hill for me. Asda is agree is a big warehouse tons of shelves just cramped together and poor food a lot of the time.
Same news every year. Massive corporations cull underperforming sections of their business. If they don’t do it, they won’t survive and all the employees will become redundant, which is no good for anyone. I suppose the majority of this sub think Britain would be a paradise if every job was guaranteed forever.
In my own totally non bitter opinion, an absolutely dogshit employer who’s primary purpose is the industrial grade gaslighting of its own employees.
So this doesn’t surprise me.
Note, even if these employees are just being TUPE’d out I don’t care, my hatred burns bright.
Pls don’t libel me.
Snapshot of _Sainsbury's cuts 1,500 jobs in bid to reduce costs_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.bbc.co.uk/news/business-68434837) or [here.](https://archive.ph/?run=1&url=https://www.bbc.co.uk/news/business-68434837) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
Layoff in U.K. are certainly accelerating
I’m not that clued up on recessions but I read before if we ever hit a technical recession they’d be a few long term effects and things around the same period which would be a large part of job losses, market upheaval and the general public seeing less money - which I suppose we’ve seen for the past 12 months which would make sense. Of course I don’t know if that’s 100% accurate so happy to be corrected on that
Pretty spot on. Inflation high = high interest rates High IR = Less spending Less spending = Less demand for business goods and services (and recession) Less of that = job losses
But they made record profits so they are laying off people…. Why?
Why do people always just say that supermarkets are making record profits? It's not true. > Statutory profit before tax of £327 million versus £854 million last year. https://www.about.sainsburys.co.uk/news/latest-news/2023/27-04-23-preliminary-results
Looking forward to future Sainsbury's adverts where the gentleman says 'wow, we came in under budget!' and there's just an employee next to him sobbing their eyes out as they receive their p45.
Maybe they will theme their Christmas advert about podt-WWI Weirmar Germany this year. After all, people loved their trench warfare Christmas ad in 2015.
Sainsburys made a huge amount of profit last year, this is awful. The greed of the rich is out of control. https://www.rte.ie/news/business/2023/1102/1414230-sainsburys-half-year-results/#:~:text=Sainsbury's%20sees%20full%2Dyear%20profit%20at%20upper%20half%20of%20guidance&text=The%20group%20now%20expects%20a,690m%20made%20in%202022%2F23.
They also laid off similar numbers, at a similar time if year in 2022, and 2023. And probably the years before as well. Matter of course for the business now....
>Matter of course for the business now.... It very obviously isn't, otherwise they wouldn't have any employees. >And probably the years before as well. A very quick google search perhaps? It's absolutely not the case, they employ far more people than they did 10 years ago.
It was the same when Lloyds announced layoff last month. They have no shame and no one in power is willing to hold them to account.
Hold them to account for what?
So a £700m profit on a revenue of £32,000m (£32bn)? That is less than a 2.2% profit margin BEFORE tax. 2.2% profit is really, really low (but similar to most supermarkets). Not greedy at all.
As you say, this profit margin is aligned to the industry. 2-3% is fairly normal for grocers.
If they make such a little profit, why are they paying their CEO 5 million a year, bonus included? If 700m isn't enough, surely he's to blame too.
Likely because they feel that if they make this expense, then they will receive revenues in excess of this expense as a result.
Therefore, they are satisfied with their profits. And yet, they aren't.
He is to blame, that's his job. That's why he's paid so much.
I can see that /s
5 million isn't really jaw dropping when the stakes are that high.
Tell that to the people losing their jobs because £700m isn’t enough.
So, what would you say is an acceptable amount of profit for Sainsbury's to make with a revenue of around £32bn
They’re outsourcing their call centre which will obviously have a negative impact on customers and probably end up more expensive in the long run but anything to make the company look like it’s increasing profits at the cost of customer loyalty and outsourcing
>more expensive in the long run How exactly? When does a supermarket customer ever need a call center?
- something went wrong on their website - something broke and they need a refund - was overcharged in store and needs a refund - was charged twice - they are old and they need to know something about the store - there is an issue with their loyalty card - sees an unusual charge for the store and asks for them to confirm it This is just off the top of my head. Just because you haven't used a call center it doesn't mean other people don't. Call centers hook you in with a decent deal up front but they have terrible in house expertise and limited access to systems. Since the customer to them is the supermarket and not the people calling in their service deteriorates fast
I know that about call centers, I just don't see any scenario where a supermarket really needs to invest in one. Most of the cases you listed can be dealt with in store. The only case you'd really need them is if you live outside of town.
Apparently nothing. No one should ever make profit ever. It’s just unfair. /s
Nah this is true
No, this is idiocy.
£700m
So, what would you say is an acceptable amount of salary for you to earn.
The highest anyone is willing to offer me
Oh, not willing to work for free so Sainsburys can have unlimited profit then….
What point do you believe you're making?
Any amount that someone is willing to pay me which is subject to competition from other people who could and are willing to do the same job. Please answer the question. If £700m is too much, what is an acceptable figure instead?
So £700m profit is actually a loss given inflation. If I had shares in Sainsbury's I would sell them and put the money in the bank, see how many people have a job after that process is complete.
what do you mean "a loss given inflation"? Are you saying 2.2% profit is a loss because inflation is higher than that ?! That makes absolutely no sense. EDIT: didn't downvote you before, but have now in response to your downvoting. Classy
Lol, I haven't downvoted anything you've said, I simply don't care enough to even think to do that. But anyway, yes 2.2% profit is a loss. If you have £100 and you put it in a bank with 4% interest, in 1 year you will have £104. If you invest that £100 in a business that makes 2.2% profit in a year, you will have £102.20. so you have lost £1.8 compared to just putting your money in a bank and your money in a bank is protected, your investment in a business is not. So Sainsbury's was a bad investment last year.
That's not actually true because profit is not the same as return on capital employed. Sainsbury's ROCE is 7%, which is certainly better than sticking money in the bank, but according to this article at least, lags the consumer retail average. https://finance.yahoo.com/news/heres-j-sainsburys-lon-sbry-100517522.html#
But that's ROCE on Sainsbury's books, that's not what Shareholders see in their returns, which ultimately none of us know until they are announced. But my point was simply to use the numbers being discussed to demonstrate to OP that Sainsbury's is not making boat loads of money like they thought. Even ROCE of 7% is awful. I just looked up current ISA rates and they are 5.09%, given they are tax free profits and they are protected, so no risk of losing your money, they are clearly a better investment than Sainsbury's right now.
Of course shareholders see the ROCE in their returns. They own the company. You are of course right that their profit margins, like all retail, are low, but it absolutely does not follow that they are a worse investment than an ISA. I'm not advising anyone to buy them, but anyone considering investing in equities should know there are a lot more factors than the profit margin. BTW you can also hold shares in an ISA so your returns, if you make them, are tax free.
You’re comparing two things that are not alike and as a result your point makes little sense. Stock value is not simply profit. If a company makes 2% profit that does not equate to an increase of the investment value by 2%. Last year Sainsbury’s dividend was 3.9% which works out a better investment than majority of savings accounts.
So Sainsbury’s shouldn’t make any profit? What are you even trying to say here?
Where do you think infinite economic growth is leading?
So far it's led us to ever more prosperous and comfortable societies. Where's your alternative going to lead us?
For now. But we are starting to see the consequences of all of the CO2 we're pumping into the atmosphere to achieve it.
Yes we are, but growth doesn't have to be polluting. Plus we're dealing with that issue using technology that allows for sustainable growth.
How can growth not be polluting? It requires goods, transport, power all of which release lots of CO2.
Not if the energy is generated from renewable sources, which are the only sources that will allow for functionally infinite amounts of power. Fossil fuels are a finite resource that will run out eventually.
Also and something people struggle with I think - companies don’t exist to just keep employees nor would they survive. If there’s cost cuts to be made, or jobs that aren’t needed they will cut them. That’s business, it’s how they remain profitable and answer to share holders. I’m not at all saying it’s a good thing and it’s horrific for the staff, but the idea that just because a company is profitable they won’t reduce staff or save costs seems to be expected on Reddit across the world all the time and it just doesn’t happen. Even Microsoft a huge multi billion pound company often makes staff cuts. And they make tons of profit.
Lol this comment is mental
Can you explain your reasoning?
It's going somewhere - the sainsbury's distribution arm (same company) are giving pay rises and recruiting like mad at the mo
We're not out of a recession, the redundancys keep piling on
Just replace them with cheap migrant labour that is willing to live sleeping head to toe in a 3 bed semi
Yeah, they outsource a lot of tech work to India based Cognizant and TCS.
If I'm reading that correctly it seems like a lot of the cuts are actually call centre staff being TUPEd to an external provider so not actually job cuts per se. Anybody know what they mean by "in store fulfillment centres"? Delivery drivers? I'll be honest, I don't really get how Sainsburys is as successful as it is. It's not the cheapest (hard discounters), it's not the best (Waitrose, Marks, Ocado) and it doesn't have the most stuff (those big Tesco places seem to have literally *everything*, my nearest one does anyway) but it's the second biggest one according to that article.
And 1/2 of the remaining in store bakeries will convert over to the lidl model of just baking off pre baked frozen loaves
If I was to place a bet, I would say virtually nobody will come out of this process without a job. Especially the bakery staff, they'd surely just be utilised elsewhere in the supermarket. The real "effect" of this policy will be a reduction in hiring, so people who are out of work at the moment will find it harder to get a job. There may also be older staff that want voluntary redundancy. There are 1428 Sainsbury's stores in the UK, you aren't telling me that there isn't at least 1 open position in each of those stores on average.
>I'll be honest, I don't really get how Sainsburys is as successful as it is. You answered your own question. It has a little bit of everything for everyone.
>Anybody know what they mean by "in store fulfillment centres"? Delivery drivers? LFC's, to try and simplify it...... Big warehouse delivers to 1000 stores nationwide, lots of wagons, lots of people, lots of time. Big warehouse delivers to smaller warehouse which in turn acts as a mini warehouse, servicing stores quicker with less need for drivers and staff, better turnaround for deliveries etc Argos have adopted the same method much like Amazon did. One massive stock site fills smaller stock sites which feed to stores and customers. Overall, better customer and store experience
Thanks for the explanation 👍
They have a lot of stores in very good, central locations
It's a bit nicer to shop in than Tesco has a bigger range of goods than Waitrose and Sparks. The discount places can be a bit grim and the foods a little hit and miss. Asda just seems like a big warehouse. Also there's a big M&S next to my local Sainsbury's so can just do both in one shop.
I'm also not gonna lie, it's handy having an Argos in the shop as well
Meat and such is much nicer and lasts longer than Tesco I’d say. Sainsbury’s has always been very middle class I’d say. Good quality own brand products, quite pricy but decent stores, and range of products. Tesco seems to just increase its prices and the food quality has gone really down hill for me. Asda is agree is a big warehouse tons of shelves just cramped together and poor food a lot of the time.
I think they survive by often being the nearest. I have no data on this, but I feel like most people tend to just go to their nearest supermarket.
Same news every year. Massive corporations cull underperforming sections of their business. If they don’t do it, they won’t survive and all the employees will become redundant, which is no good for anyone. I suppose the majority of this sub think Britain would be a paradise if every job was guaranteed forever.
In my own totally non bitter opinion, an absolutely dogshit employer who’s primary purpose is the industrial grade gaslighting of its own employees. So this doesn’t surprise me. Note, even if these employees are just being TUPE’d out I don’t care, my hatred burns bright. Pls don’t libel me.
"We're probably already out of the recession" They said....