Britain's Sainsbury's to close two depots, 1,400 jobs affected

LONDON (Reuters) -British supermarket group Sainsbury's plans to consolidate five existing Sainsbury's and Argos general merchandise depots into three, closing two by 2026, in a move that will impact 1,400 workers, it said on Tuesday.

The sites proposed to close are in Basildon, south east England, and Heywood, northern England.

The jobs impacted will be both Sainsbury's employees and those who work for third party partners, it said, noting that those impacted will have the opportunity to explore alternative roles within the supermarket group.

Sainsbury's also plans to further automate operations at its Daventry site in central England, investing about 90 million pounds ($109 million).

"As part of our plan to create a simpler business, we previously set out our intention to integrate our Argos and Sainsbury’s logistics networks," said CEO Simon Roberts.

"This also allows us to reduce costs, so we can invest where it will make the most impact for our customers."

All of Britain's major grocers are seeking cost savings as they try to keep a lid on rising prices and better compete with German-owned discounters Aldi and Lidl.

Sainsbury's, second only to market leader Tesco, is seeking savings of over 1.3 billion pounds in the three years to 2023-24.

The group also said it would this year close its office in Milton Keynes, central England, and its three remaining Habitat showrooms.

Shares in Sainsbury's were down 0.5% in afternoon trading, paring 2023 gains to 24%.

($1 = 0.8243 pounds)

(Reporting by James Davey, Edited by Paul Sandle)