Jobs cut in Safeway shake-up

Argyll, the Safeway supermarket group, announced 124 store closures and 4,800 job losses yesterday in a major restructuring intended to take the battle to the market leaders Sainsbury and Tesco. The City responded warmly and Argyll shares finished 18p higher at 319p.

The company is disposing of 104 of its Presto stores and 20 branches of Safeway with the loss of 1,800 jobs by the end of June. Most of the cuts will be compulsory redundancies. A further 3,000 jobs will go as a result of management pruning in the supermarkets. Safeway is removing department managers who run in-store divisions such as bakeries and meat, replacing them with a new structure designed to push more staff out onto the shop floor.

Staff will have to re-apply for other jobs such as customer service managers and replenishment managers. Many of the new positions will be on lower salaries.

Safeway also announced plans to create 7,500 jobs over the next two years, when it will open 34 new stores. The re-organisation involves a pounds 195m re-structuring charge, but Argyll says the changes should yield annual cost savings of pounds 60m, of which pounds 25m will be re-invested in marketing and customer service programmes.

Announcing the changes, Argyll's chairman, Sir Alistair Grant, said: "Under our Safeway 2000 initiative, we are re-inventing ourselves. I want Safeway to be a leader rather than a follower. We are in a better position to come up with new initiatives." He said this was the end of large-scale shop closures and redundancies.

David McCarthy, food retail analyst at BZW, applauded the changes, saying: "The strategic review is under way and now seems to be producing good results. We now want to see the sales per square foot driving forward."

Safeway is targeting the middle-income family shopper and extending a number of new intitiatives. The number of creches will be extended from 14 to 41 and the self-scanning trial is to be extended to another three branches. Dry-cleaning outlets, photo processing labs and coffee shops will be added to more stores.

Safeway has pledged to improve its sales per square foot from the current pounds 12.86 to pounds 15 within three years. This is still below competitors such as Sainsbury's pounds 20 per square foot and Tesco's pounds 17.

After a poor first half of the year, like-for-like sales picked up in the second half to yield a total of 0.7 per cent. However, like-for-like sales in the seven weeks since April have been up five per cent, better than Sainsbury's 2.3 per cent but behind Tesco's recently reported 7 per cent.

The restructuring announcement came as Argyll unveiled pre-tax profits up 3 per cent to pounds 375m, excluding the re-structuring charge. Sales improved by 4 per cent to pounds 6.28bn. The dividend was also increased by 4 per cent to 12p. Analysts are forecasting pre-tax profits of pounds 420-pounds 430m for the current year.

Comment, page 39

Confusing signs, page 40

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
VIDEO
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
News
Russia's President Vladimir Putin gives his annual televised question-and-answer session
peopleBizarre TV claim
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
Arts & Entertainment
Comedian Lenny Henry is calling for more regulation to support ethnic actors on TV
tvActor and comedian leads campaign against 'lack of diversity' in British television
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Life & Style
life
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit