Sainsbury’s has revealed that it plans to close two Argos distribution centres, shut down the general merchandise retailer’s Milton Keynes head office, and close three remaining Habitat showrooms as part of its wider drive to cut costs.
The warehouses in Basildon, Essex and Heywood, Greater Manchester, are expected be closed by 2026, leaving the group with three non-food DCs that will serve both Sainsbury’s and Argos. The move, part of a £90m restructuring of Sainsbury’s distribution network, will impact around 1,400 workers. The plan also involves investment in additional automation at a warehouse in Daventry, Northamptonshire.
Sainsbury’s stated that the changes would create a “simpler, more modern network to significantly improve availability, reduce stock and enable faster customer deliveries”.
Meanwhile, the closure of Argos’s underutilised head office is not expected to result in any job losses, with affected staff moving to one of Sainsbury’s other offices.
The three remaining Habitat showrooms will close later this year, with plans to launch replacement digital showrooms to reflect the shift to online shopping.
Amid soaring inflation, all the traditional supermarkets have been trimming costs to invest in keeping prices competitive against the discounters.
Sainsbury’s has previously pledged to deliver £1.3bn of cost savings in the three years to September 2024. This has seen it close in-store cafes, fresh food counters and high street Argos stores.
Simon Roberts, Chief Executive, said: “As with any major change to our business, we have not taken the difficult decision to start this consultation lightly. 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.
“Over the last few years, we’ve been working hard to transform this network as we make our business simpler, more efficient and more effective for customers. This also allows us to reduce costs, so we can invest where it will make the most impact for our customers.”
NAM Implications:
- All part of the cost-cutting rationalisation of assets being undertaken by retailers everywhere.
- Hopefully, with minimal reduction in service level
- However, suppliers need to build this into their Sainsbury’s package!
