UK retail giant Tesco has announced that it will shut down food counters in 90 stores as part of its restructuring plan that is likely to throw nearly 9000 staff out of work. The large supermarket chain has said that it will continue selling fish, meat and deli products in its remaining 700 stores either on full-time or flexi basis depending on demand. It will stop offering its hot food at its canteens and will remove staff from its head office. It announced that though this restructuring effort will affect 9000 odd workers a large number of them could be redeployed.
Since the current CEO Dave Lewis took the reins of the firm in 2014 more than 10000 people have been laid off at Tesco as the organization is trying to save £ 1.5 billion due to intense competition between supermarket chains. The firm stated that these steps were being taken as it saw customers spending less time at their counters due to paucity of time even to buy essentials so they are making changes in their store layouts to ensure value to their customers depending on their needs.
Though the firm makes nearly a billion pounds every year on profits and witnessed strong sales in Christmas it seems really keen on cutting costs to keep themselves afloat. Competition on UK’s retail sector has really become intense after arrival of discount stores that are steadily eroding market shares of large players like Tesco, Sainsbury and several others. A looming problem on the horizon for Tesco is the attempts by Sainsbury to take over ailing ASDA which if approved by competition regulators will make it as powerful as Tesco which will have as much bargaining power from suppliers. While helpful staff in stores appears pleasing to customers, they cost money and Tesco insists that people now prefer to help themselves.