Shares of J Sainsbury plc (LON: SBRY) today fell 4.35% after the UK’s second-largest supermarket chain announced plans to cut 3,500 jobs at 420 standalone Argos stores by 2024.
The retailer said that the move was part of plans to align its business with the significant shopping changes brought about by the coronavirus pandemic.
Sainsbury’s bought Argos, a UK catalogue retail business in 2016, and plans to open 150 new stores under its Sainsbury’s brand, which is more recognised within the UK.
The supermarket chain also revealed that its earnings for the six months ended 19 September 2020 where total retail sales were up 7.1%, while comparable sales rose 6.9%, grocery sales rose 8.2%, while general merchandise sales were up 7.4%.
The group’s digital sales grew exponentially by 117% to £5.8 billion comprising nearly 40% of the retailer’s total sales; grocery sales also rose 102%.
However, Sainsbury’s reported a £137 million pretax loss during the review period driven by a £438 million one-off cost related to the closure of the Argos stores. The supermarket chain reported an underlying pretax profit of £301 million.
Simon Roberts, CEO of Sainsbury said: “COVID-19 has accelerated the number of shifts in our industry. Investments over recent years in digital and technology have laid the foundation for us to flex and adapt quickly as customers needed to shop differently.”
Sainsbury’s share price
Sainbury’s shares today fell 4.35% to trade at 199.8p having dropped from Wednesday’s closing price of 208.9.