More than 1,800 jobs are at risk at Tesco after the retailer revealed it was planning to overhaul its in-store bakeries to adapt to changes in consumer tastes and preferences.
Tesco highlighted that its customers are buying fewer traditional loaves of bread and are increasingly looking for a wider range of options, with sales of wraps, bagels and flatbreads on the rise.
From May, Tesco plans to offer more alternatives to traditional loaves in its stores. It will continue to offer scratch baking in 257 of its stores but will be making some changes to other bakeries. In 201 stores, the most popular products will continue to be baked from scratch with other products moving to part-baked. And in 58 outlets, Tesco is converting the bakery to full bake-off where all products are delivered pre-prepared, then baked and finished in store.
The group also revealed that as well as investing in new fixtures, it will continue growing its regional bakery ranges in partnership with small local suppliers.
Tesco stated that with some stores doing less scratch baking, it now needed less staff to work in these areas and as a result, 1,816 bakery staff face redundancy.
Affected staff will be offered support and the chance to remain with the business by applying for the “thousands of vacancies” available across its stores.
Jason Tarry, Tesco UK & ROI Chief Executive, said: “We need to adapt to changing customer demand and tastes for bakery products so that we continue to offer customers a market-leading bakery range in store.
“We know this will be very difficult for colleagues who are impacted, and our priority is to support them through this process. We hope that many will choose to stay with us in alternative roles.”
The main union representing Tesco employees, Usdaw, said the reports of job cuts were “devastating” for staff.
The shake-up of its in-store bakeries comes after Tesco last year continued to progress its cost-savings programme that put thousands of jobs at risk in its stores and head office as part of moves to simplify its business and adapt to changing shopping patterns. The changes included closing fresh fish, meat and deli counters in around 90 of its larger stores with the remaining 700 trading with either a full or flexible counter offer.
Thomas Brereton, a retail analyst at GlobalData, said the bakery announcement comes as little surprise: “Although Tesco has attempted to justify the cuts by citing a ‘big shift in customer tastes and preferences’, the move is likely more as a result of yet another bid to reduce operating costs and protect margins in the face of greater competition from the discounters Aldi and Lidl.”
NAM Implications:
- Cuts simply give breathing space…
- Meanwhile, Aldi and Lidl march onwards…
- …relentlessly.
- Key is how the mults reshape the business model to catch up…
- …and where relative shares of mults and discounters end up…
- …and how your mults-driven organisation matches up…
