12th May 11
Sainsbury’s staff bonus pool slashed by quarter
by Harry Oldfield
- Sainsbury’s staff: smaller bonus pool
- Sainsbury’s staff: smaller bonus pool
Supermarket giant J Sainsbury’s staff bonus pool has dropped by a quarter, in spite of the supermarket chain posting improved profits and sales for the latest financial year.
The company’s 150,000-strong workforce will have to share £60m, announced Sainsbury’s on Wednesday morning, upon announcing its preliminary results for the previous 12 months. Last year, the company announced a record bonus pool of £80m.
Sainsbury’s informed that its bonus pot had shrunk due to the fact that they set themselves stretching targets and will remain doing so. It works out at £400 per employee, but individual payouts are set to depend on the amount of hours that an employee works – the current average is 24 hours per week – so staff who are full-time would get more, whereas people who just work weekends, for example, will be awarded less.
At £60m, the bonus pot is back at the same amount it was at two years ago. But in 2009 this worked out as £500 per staff member – this time payouts will be lower because the company’s workforce has expanded by roughly 30,000 since then.
The supermarket’s annual report, which is set to be published in June, will reveal whether boardroom bonuses have fallen too. Last year Justin King, the company’s chief executive, received a pay and bonus package of £8m.
Over the past year the supermarket industry has had to deal with falling consumer confidence as well as high inflationary pressures. On an underlying basis, the company’s pre-tax profits increased by nine per cent to £ 665m over the year to 19 March. Like-for-like sales, not taking fuel into account but including the impact of the VAT rise in January, were up by 2.3 per cent.
Sainsbury’s warned that the economic outlook in the UK remained unclear. King stated that consumer spending is likely to be closely linked to whatever impact inflation has on household budgets, as well as unemployment. He said that the most positive indication in the economy is that jobs are being created in the private sector.
Arden Partners analyst Nick Bubb described Sainsbury’s profit growth as mediocre compared to Morrisons’.
King stated that Sainsbury’s continues to expand its non-food division, adding that it was now the seventh largest clothing retailer in the UK. He also predicted that Sainsbury’s would perform better than the wider supermarket sector during the coming 12 months, which he anticipates recording positive growth in like-for-like sales in spite of continuing pressure on consumer.
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