Further job losses at Tesco: Supermarket giant warns 1,600 workers now at risk – and axes low cost Jack’s challenger it launched to rival Aldi and Lidl
Tesco has warned of job losses for the second consecutive day, with 1,600 workers now facing redundancy amid change to the supermarket overnight roles.
Having axed its chain of low-cost stores and shut more than 300 deli counters in a major shake-up announced on Monday, Tesco said on Tuesday it was moving overnight stock replenishment to daytime trading hours, thereby putting overnight workers’ jobs at risk.
Tesco currently has around 3,000 vacancies across the business and the group said it would work with affected employees in efforts to find them an alternative role.
Tesco launched Jack’s – named after Tesco founder Jack Cohen – to much fanfare in 2018 to compete with German discounters Aldi and Lidl
The group will move overnight stock replenishment into the daytime in 36 large stores and 49 convenience stores.
In 36 stores, Tesco will convert petrol stations to be pay-at-pump only during overnight hours.
The supermarket giant said the changes were part of ‘efforts to serve customers in the best way possible in a competitive market by running our business as simply and efficiently as possible, so we can re-invest in the things that add most value for customers’.
Tesco UK and ROI CEO, Jason Tarry, said: ‘We operate in a highly competitive and fast-paced market and our customers are shopping differently, especially since the start of the pandemic.
‘We are always looking at how we can run our business as simply and efficiently as possible, so that we can re-invest in the things that matter most to customers.
‘The changes we are announcing today will help us do this. Our priority now is to support our impacted colleagues through these changes and, wherever possible, find them alternative roles within our business.’
It follows in the wake of Monday’s decision to axe the supermarket’s low-cost Jack’s stores.
The supermarket giant launched Jack’s – named after Tesco founder Jack Cohen – to much fanfare in 2018 to compete with German discounters Aldi and Lidl.
The seven shops marked for closure – in Hull; St Helen’s in Lancashire; Walton in Liverpool; Castle Bromwich in the West Midlands; Middlewich in Cheshire; Barnsley; and North Liverpool – will be shuttered in the coming months, putting 130 jobs at risk.
However, less than four years on Tesco is planning to permanently close seven of the 13 Jack’s stores while converting the remaining six into superstores under its own branding.
Tesco will continue to provide Jack’s branded products to independent convenience stores supplied by its Booker wholesale business.
Lessons from the Jack’s project that have been incorporated across Tesco stores include Aldi price matching as well as its ‘Fresh 5’ fruit and veg discounts.
The closure of the chain will mean ditching part of the legacy of former Tesco boss Dave Lewis, who was in charge from 2014 to 2020 and was widely credited with helping turn the company around following an accounting scandal and a string of profit warnings.
He handed over the reins to Ken Murphy in October 2020.
Retail analyst Clive Black at Shore Capital said Jack’s had always been a ‘sub-scale business’ at Tesco and that it was not worth the expense to keep operating its relatively small estate.
‘To run a discounter you need hundreds of stores,’ he said. ‘Thirteen just isn’t feasible in the long run. Jack’s has reached the end of the line.’
Meanwhile, Tesco also announced that it will be closing meat, fish and hot deli counters in 317 of its stores due to low demand. The service will remain at just 279 Tesco stores.
The move is expected to affect hundreds of workers, although the retailer stressed that there would be no redundancies related to the counter closures. Tesco currently has 3,000 vacancies.
However, Black said the move would be ‘very good news’ for Tesco rival Morrisons, which will be the only major supermarket left still offering widespread counter service to shoppers.
Tesco enjoyed a bumper Christmas with industry figures from Kantar recently showing it outperformed its major rivals in the 12 weeks to Boxing Day.