J Sainsbury PLC (LSE:SBRY) will shut two distribution sites serving its subsidiary Argos in the coming years, as it looks to create a “simpler” network, cut costs and increase automation.
Sites in Basildon, Essex, and Haywood, Greater Manchester, are expected to be closed by 2026, putting 1,400 jobs at risk, alongside Argos’ head office in Milton Keynes this year, Sainsbury's said on Tuesday.
It is part of ongoing plans to “integrate […] Argos and Sainsbury’s logistics networks,” chief executive Simon Roberts explained, adding the move would help “reduce costs”.
Money will also be pumped into its Daventry warehouse, increasing automation at the site, something Shore Capital analysts previously said Sainsbury’s should be actively exploring.
Sainsbury’s claimed the rejig would create a more “modern” distribution system and could “significantly improve availability, reduce stock and enable faster customer deliveries”.
“Over the last few years, we’ve been working hard to transform this network as we make our business simpler, more efficient and more effective,” Roberts added.
Sainsbury’s has enjoyed a 20% rise in its share price this year as it continues a strategic reshuffle, which has seen cut prices by £500mln across its stores since March 2021 to fend off gains by rivals Aldi and Lidl.