Tesco plans 10,000 jobs as Sainsbury cuts back

THE WIDENING gap between Britain's two largest supermarket groups will be underlined this week when Tesco announces the creation of 10,000 new jobs alongside strong trading figures while Sainsbury's is tipped to unveil job cuts at head office.

Tesco is creating the jobs as part of an expansion programme which includes the opening of 20 stores and a host of store extensions.

The jobs will be announced tomorrow alongside a big jump in profits to pounds 870m for the full year. Like-for-like sales are also thought to have been ahead of the industry average, at about 3.56 per cent.

Sainsbury's, however, is expected to announce sales growth of just 1.5 per cent, excluding new space, when it reports its fourth-quarter figures on Friday. This is below the industry average of just over 2 per cent and further evidence that it is ceding market share to Tesco. Profits are expected to be around pounds 750m.

Sainsbury's yesterday declined to comment on reports of impending job losses at its head office in London. There have been suggestions that Dino Adriano, the company's chief executive, is looking to cut 350 jobs in an attempt to reduce costs and improve efficiency. The losses could include up to 80 senior executives in what is still a slow-moving bureaucracy at central operations. "We don't comment on market speculation," a spokesman said.

Separately, Sainsbury's will today report to staff at the division's head office at Wokingham, Berkshire the results of a strategic review of its SavaCentre operation. There has been speculation that the office will close, with the loss of 300 jobs, as the company moves the business closer to its main supermarkets operation.

Sainsbury's board is under pressure to improve performance following a profits warning in January and the failure of its John Cleese campaign. Finance director Rosemary Thorne is leaving in July and insiders say there could be more top-level changes if the current strategy does not start yielding results.

Sainsbury's yesterday declined to comment on the possibility of the Sainsbury's family selling part of its 35 per cent stake in the business.

Asda is due to meet analysts on Wednesday. The group is thought to be trading well, although William Morrison, the Bradford-based supermarket, is also enjoying success with a series of special offers. Asda said a few months ago consumerspreferred everyday low prices.

The supermarket groups are expected to seize the opportunity this week to make further criticisms of the Office of Fair Trading's investigation into alleged profiteering in the pounds 60bn grocery industry. The matter was referred to the new Competition Commission last week.

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