UK’s largest supermarket Tesco to shed 9,000 jobs
5 February 2019
Amid speculation about 15,000 possible job losses, UK supermarket giant Tesco has confirmed that it will shed 9,000 jobs.
Tesco announced its intention to close 90 fresh-food counters and delicatessens as part of a three-year restructuring plan initiated in 2016 in a bid to save £1.5 billion. Hundreds more jobs will disappear as 200 staff canteens are shut—a service provided by outsourcing companies since 2017. The numbers of head-office employees will also be trimmed.
It expects to save between £150 million to £170 million a year with the latest job losses and achieve an operating margin of 3.5 percent to 4.0 percent by 2019-2020—up from 2.9 percent in 2017-2018.
As the biggest supermarket chain in the UK, Tesco captures a quarter of the market in groceries. It is the largest private employer in the UK, with 324,000 workers employed at more than 3,400 stores in the UK and Ireland.
Competition in the retail industry, which is the biggest employer in the private sector, is fierce and growing. In 2017, around 9.5 percent of the workforce or 2.8 million workers were employed in retail. Retailers predict that a third of these jobs will be lost by 2025.
German-based budget retailers Aldi and Lidl are steadily eroding the market share of the older established chains like Tesco, by undercutting their prices. In the run-up to Christmas, Aldi’s sales increased by 10 percent. If Tesco rival Sainsbury’s manages a takeover of Asda, its very size will increase its bargaining power with suppliers and pose a challenge to Tesco.
Continued austerity and low wages, still below their pre-2008 levels, have reduced the disposable income of consumers. Two thirds of those in work in the UK are classed…