Tesco puts 1,800 jobs at risk as it scales down in-store bakeries

Joanna Partridge
Photograph: Bloomberg/Bloomberg via Getty Images

More than 1,800 jobs are at risk at Tesco, after the retailer said it would cut staff at its large in-store bakeries to adapt to changing consumer tastes.

The supermarket chain said it would do less baking from scratch in stores from May onwards, and would require fewer bakery staff as a result. Tesco said customers were buying fewer traditional loaves of bread, and are increasingly choosing options such as wraps, bagels and flatbreads instead.

Jason Tarry, the chief executive of Tesco’s UK and Irish business, said: “We need to adapt to changing customer demand and tastes for bakery products so that we continue to offer customers a market-leading bakery range in store.”

Britain’s largest retailer, which employs more than 300,000 people in the UK and has more than 3,400 stores, said it hoped to offer alternative roles to the 1,816 bakery staff affected.

Pauline Foulkes, the national officer for the Usdaw union, which represents thousands of Tesco workers, said it was devastating news for the bakery staff.
“Many of those affected by the proposed changes are skilled workers. While we will do everything possible to maintain jobs or support impacted staff to redeploy into alternative roles, the reality is the opportunities to find suitable alternative skilled roles may be limited for these workers.”

Tesco will continue to offer products baked from scratch in 257 of its stores, but in others the items will be delivered pre-prepared, but baked and finished in store.

The shake-up of in-store bakeries comes a year after Tesco said it would close fresh food counters in about 90 of its stores and cut head office roles, putting up to 9,000 jobs at risk. It said the decision was also due to time-poor shoppers using fish, meat and other fresh food counters less often. At the time the chain said it did not plan any significant changes to its in-store bakeries during 2019.

Tesco also announced 4,500 job cuts at its 153 high street Tesco Metro stores in August. It said this was a response to a shift in customer behaviour towards using the Metro stores for convenience shopping rather than large weekly food shops.

Including the latest changes to in-store bakeries, the total number of job cuts announced at Tesco over the last 12 months comes to more than 15,000.

Thomas Brereton, a retail analyst at GlobalData, said the bakery announcement comes as little surprise: “Although Tesco has attempted to justify the cuts by citing a “big shift in customer tastes and preferences”, the move is likely more as a result of yet another bid to reduce operating costs and protect margins in the face of greater competition from the discounters Aldi and Lidl.”

Tesco has a 28% share of the UK grocery market but is under pressure from the German budget chains Aldi and Lidl, which are growing their market share and continuing to open new shops.

Tesco’s outgoing chief executive, Dave Lewis, has spent his five years in charge slashing costs and cutting jobs at the supermarket giant, trying to rebuild its profits following an accounting scandal in 2014.

The retailer also announced on Tuesday it had completed its exit from China, by selling its 20% stake in Gain Land for £275m, to a subsidiary of its partner in the venture, state-run China Resources Holdings. Tesco said it would use the proceeds for “general corporate purposes”.