Supermarket giant Sainsbury’s is to close over 100 stores and open new convenience outlets in a bid to reduce costs by c.£500m over five years. 

The business said, in its second quarter trading report, that it will be closing up to 125 stores across the UK as well as shutting down 70 standalone Argos stores and moving them into nearby Sainsbury’s stores.

Mike Coupe, chief executive officer, said: “Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in Grocery. We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers. At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability.

“Argos continued to grow market share in key categories, but sales were impacted by reduced promotional activity and the timing of new product releases in gaming and toys. Clothing sales were boosted by clearance activity and strong online growth and Tu continued to grow market share. Financial Services sales were in line with expectations.”

Will Broome, CEO and Founder of retail shopping app, Ubamarket said:”Today’s announcement from Sainsbury’s could, on one hand, be worrying for the retail industry as if the likes of the big four supermarkets experience store closures, who else will follow suit?

“However, perhaps the industry could benefit from the news by taking note of changing consumer trends and the potential rise in popularity of convenience stores. When customers enter a local store, the experience is quick and efficient as they tend to know where the milk, the eggs and the bread are located.

“Supermarkets and local stores alike need to adopt ways to create the same experience so that consumers can shop and buy at ease – which ultimately encourages more footfall into stores. Incorporating technology, such as in-app payments, stock checkers and personalised offers, to make the high street offering as convenient as possible will help to resurrect the high street using 21st-century solutions.”