Sainsbury’s is set to close 200 of its in-store cafes and some of its hot food counters as part of an overhaul that will see it roll out its new Restaurant Hub food hall format.
The retailer stated that it wants to transform its eat-in, takeaway and home delivery food and drink offer to give customers a better experience. Sainsbury’s has been trialling The Restaurant Hub concept at its Selly Oak store in Birmingham in conjunction with the Boparan Restaurant Group (BRG). It features a range of restaurant brands, including Caffè Carluccio’s, Gourmet Burger Kitchen, Ed’s Diner, and Slim Chickens.
The two companies are planning to open 30 more The Restaurant Hubs in the next year, with the intention to accelerate the roll-out if the format proves popular.
Sainsbury’s will also open another 30 Starbucks coffee shops in its supermarkets in the next twelve months, bringing the total number to 60. Working with BRG and Starbucks, Sainsbury’s plans to overhaul its offer in 250 supermarkets over the next three years.
The cafe closures this spring will put around 2,000 jobs at risk. However, the retailer has promised that impacted staff will be prioritised for vacant roles in its stores and will be encouraged to explore alternative roles within the wider business. 67 Sainsbury’s cafes will remain open while Sainsbury’s reviews its rollout plans.
Meanwhile, in a similar move to cost-cutting elsewhere in the supermarket industry, Sainsbury’s announced plans to close less popular hot food counters in 34 of its stores and simplify the way it runs its bakeries at 54 sites. The retailer hopes to redeploy those staff affected to other areas of their store.
Both Sainsbury’s and Tesco have been closing their fresh food counters in stores over the last couple of years to reflect changes in shopper habits.
Commenting on the developments, Simon Roberts, Sainsbury’s Chief Executive, said: “Through our trials with Boparan Restaurant Group and Starbucks we have learnt that we can offer customers a much better eat-in and takeaway experience working with partners. We are totally focused on improving what we can deliver for our customers and at the same time, working hard to make our business simpler. We are really excited about this new customer offer we will be rolling out over the next two to three years across many of our stores.”
Roberts said that it had been a “difficult decision” to close the cafes and stressed that the company would support affected staff in “any way we can”.
He added: “We understand this is very unsettling for our colleagues, but we must keep adapting our business to make sure we are offering customers the best possible food and drink at affordable prices.”
Satnam Leihal, the Chief Executive of BRG, highlighted that the food hubs allowed customers to place orders with multiple brands in one transaction. They could be eaten in store or delivered together, with just one delivery charge. “This gives customers choice that never existed before,” he said.
Commenting on Sainsbury’s plans, Richard Lim, the Chief Executive of Retail Economics suggested that the pandemic had brought about huge changes for the food industry.
“Disruptive technologies have created near-frictionless access to groceries, takeaway and food on-demand, resulting in greater competition and the merging of channels,” he said.
Lim added that takeaways could be a “lucrative opportunity” for supermarkets that have enough stores to supply large numbers of people with lots of different cuisines.
He said: “The takeaway market has seen impressive growth in recent years as digital platforms provide greater choice, faster deliveries and more competition. So there’s no surprise that the supermarkets are trying to establish a firm foothold in the market and cater for evolving consumer habits.”
NAM Implications:
- Lockdown and Takeaways says it all…
- But one of many fundamental shake-outs arising.
- Benefits for those businesses that can recognise the change, and act decisively…
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