Sainsbury's is creating more than 1,000 jobs in the West Midlands as part of a multi-billion-pound sales drive to claw back market share surrendered to rivals such as Tesco. The company, which operates 47 stores in the region, said 220 permanent jobs were to be generated, plus 800 temporary posts over Christmas. At the same time two small Sainsbury's Local Stores, in Bennets Hill, Birmingham, and in Lower Precinct, Coventry, are to close and staff relocated. In total Sainsbury's has promised to recruit 3,000 shop floor staff as part of a strategy aimed at growing sales by £2.5 billion over three years. Under the banner Making Sainsbury's Great Again, chief executive Justin King said yesterday that his intention was to take the retailer back to its strengths with a primary focus on food and a drive to keep shelves better stocked. As well as the extra staff, workers - who the company admits have become demoralised - will be offered a new bonus scheme to reward them on store standards and availability of products while customers will benefit from £400 millionworth of price cuts. The campaign will, however, cost about 750 head office staff their jobs and shareholders half their dividends this year. Sainsbury's, once the UK supermarket leader but now languishing in third place behind Tesco and Asda, has issued three profits warnings this year. The campaign will wipe an estimated £550 million off its bottom line and result in a loss in the current year. The need for an overhaul was highlighted by forecasts from Sainsbury's showing underlying profits for the first six months of its financial year would be down by two- thirds at between £125 million and £135 million. As well as falling sales, Sainsbury's financial performance has been hit by a disastrous £1 billion investment in new technology. "We wrote to one million customers and got replies from a quarter of a million, and what they said was they wanted to see us going back to what made us great, and that is fantastic quality food at fair prices," Mr King, Sainsbury's fourth chief executive in ten years, said. "We think we can deliver both. We can deliver much better quality and we can also deliver lower prices than we do today." Mr King said he was encouraged by the fact that 14 million people continue to shop at Sainsbury ' s despite its difficulties. "It means that, despite the fact that we have been letting our customers down, they are still visiting us, but the basket size is down because we do have significant challenges with availability," he said. Analysts gave a guarded welcome to the strategy announcement, but the reaction of the Sainsbury family, who still control 35 per cent of the shares, will be closely watched. A decision to sell on their part would almost certainly spark a takeover bid. "The market is relieved there's nothing worse in the statement," said Colin Morton of Rensburg Fund Managers. "It's difficult to get a sales-led recovery when you're up against the likes of Tesco, Wal-Mart's Asda and Morrison. It's a question of watch this space and see if they can deliver." Paul Kavanagh, of stockbrokers Killik, said: "The scale of the turnaround is huge and correcting past investment mistakes in a logistics operation that plainly does not work is one area for immediate attention. "Shareholders are paying the price of this re-organisation but the share price appears to suggest that new boss Justin King has the market on his side." | 
