Sainsbury’s unveils five-year plan to open 120 new stores but will CLOSE more than 100 undisclosed Local and Argos locations as group aims to move on from failed Asda takeover

• Sainsbury’s said it will close 15 large supermarkets and 40 convenience stores
• It will also close up to 70 Argos stores, but relocate 80 into its supermarkets 
• It also announced its financial services arm would stop new mortgage lending

Sainsbury’s has unveiled its five-year plan to open 120 new stores but will close more than 100 undisclosed Local and Argos locations as the group aims to move on from its ill-fated takeover of Asda.

Speaking to analysts following a store tour in Southampton, bosses explained their reasoning behind the changes, which will ultimately lead to cost savings of £500 million.

The company said 70 Argos shops will close and around 80 will open within its supermarkets. Up to 15 large supermarkets and as many as 40 convenience stores will also close, with 10 big stores and some 110 convenience stores opening.

The group also announced it will close up to 15 large supermarkets and as many as 40 convenience stores, but will open around 10 big stores and some 110 convenience outlets

The five-year plan, being led by chief executive Mike Coupe (pictured), is set to cut costs by around £500 million over the next five years and comes after the failure of its ill-fated £7.3 billion takeover tilt for rival Asda

Chief executive Mike Coupe was asked repeatedly how many staff would be affected by the changes, which stores are set to close, where the new sites could be located, or when workers would be informed if their store is safe. He declined to comment, only saying ‘we think it’s a good news story for our colleagues’.

Sainsbury’s in numbers

The retail behemoth has 608 supermarkets and 820 convenience stores.

It also also 1,200 Argos locations.

As well as selling food and other items the company is also a mortgage lender. 

Sainsbury’s current mortgage book is £1.47bn 

Finance chief Kevin O’Byrne said: ‘These are stores we don’t see a long-term future for.’

The company explained it reviews all properties every five years to identify which stores are underperforming, and acts accordingly.

However, sources said the decision on which stores has not been made and will close ‘over a period of time’ during the next five years.

Sainsbury’s also announced its financial services arm would stop new mortgage lending ‘immediately’ as part of its five-year plan.

The company is considering its options for its mortgage book of 7,000 customers, including a potential sale, following rival Tesco’s recent move to offload its home lending business.

The grocer said it expects to close up to 70 Argos stores, 15 large supermarkets, and as many as 40 Sainsbury’s Local stores

Bosses also said they do not plan to put any more cash into funding Sainsbury’s Bank.

Other details to emerge from the presentation included plans to continue cutting costs – highlighting that Sainsbury’s has reduced prices against Aldi by more than 700 basis points.

A major overhaul of the supermarket’s ‘basics’ range is also ongoing and will be expanded after the company admitted the budget lines had been underperforming.

Tesco relaunched its ‘value’ range in 2016, creating a series of fictional brands, replacing the ‘Everyday Value’ labelling, and some of the products displayed by Sainsbury’s appeared to be taking inspiration from its rival.

The J.James & Family Cooking Bacon brand has already proved popular, bosses said, and they will also be rebranding its Taste The Difference range.

Elsewhere in the business, bosses said they would be introducing new technology to make shopping easier and had improved availability after a overhaul of store staff roles led to some sites running out of stock.

Sainsbury’s also said it would reduce its debts by £750 million over the next three years.  

Joanne McGuinness, Usdaw National Officer said: ‘Our members in Sainsbury’s are very concerned about this announcement and we are seeking an urgent meeting with the company to hear the details of their proposals. 

‘In the meantime we are providing our members with the support they need during this period of uncertainty.’

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