King prepares to wield axe in revival struggle

Justin King, the chief executive of J Sainsbury, is planning to cut hundreds of head-office jobs in the latest attempt to revive the ailing supermarket

This is expected to be one of the main planks of his turnaround strategy, due to be published on 19 October, according to well-placed sources.

Head-office jobs have already been cut by 20 per cent over the past year. Industry sources believe that another 20 to 25 per cent cut is on the cards.

The future reputation of Sainsbury's rests on Mr King's plan. Over the past few years, the supermarket has seen its market share eaten away by Tesco and Asda. Many analysts believe the decline has become so severe that Mr King's strategy is the last real hope for a revival at the chain.

However, the chief executive may disappoint the City. One well-placed source conceded that the plan "is not going to be that dramatic". However, the source added: "There are no sacred cows. [Mr King] is looking at all areas of the business."

Sainsbury's foray into non-food sales is also under Mr King's microscope. It is understood that he will recommend reducing the number of non-food items - in contrast to the moves made by Tesco and Asda.

But analysts expressed concern that he might scale back non-foods too far. "However poorly non-food has gone over the past year, that is absolutely not a reason to get rid of it," said Richard Hyman, the chairman of Verdict Research.

Mr King is also playing close attention to Sainsbury's IT systems. Senior staff have produced a list of problems with its computer systems, which were outsoucred to management consultancy Accenture.