COVID-19: Sainsbury’s reports £261m loss as pandemic and shake-up costs bite
Sainsbury’s has reported a £261m loss for the year as it counted the cost of falling fuel sales and COVID-19 measures.
Britain’s second-biggest supermarket chain said grocery sales for the year to 6 March climbed by 7.8% but overall revenues were flat as fewer motorists used their cars during a year of lockdowns.
COVID-19 costs of £485m – covering staff absences as well as measures to make stores safe – plus one-off restructuring charges took the group into the red for the year.
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Chief executive Simon Roberts said: “This year’s financial results have been heavily influenced by the pandemic.
“Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.
“Like our customers, we are all looking forward to things feeling more normal over the coming months and getting excited about a summer of celebration, but we are also cautious about the economic outlook.”
The results, like those of rival Tesco, reflected a year in which supermarkets have benefited from being allowed to remain open while other “non-essential” retailers have had to stay closed but also faced steep added costs as a result of the pandemic.
Keeping stores trading has meant a boost not just for food and drink sales, which have benefited as consumers were not able to eat out, but also general merchandise, where Sainsbury’s – which owns the Argos brand – saw revenues climb by 8.3%. However clothing sales fell by 8.5%.
The supermarket has also seen a big shift online, with digital sales doubling. Online orders have grown to represent 17% of grocery sales, up from 8% the year before.
But fuel sales fell by 39% reflecting “significantly reduced demand through the year” as well as the impact of the lower oil global price on forecourt petrol prices.
That mean that overall revenues were up by only 0.2% at £29bn.
COVID costs of £485m included “paying vulnerable colleagues who were isolating, absence costs, protecting customers and colleagues, increasing marshalling in stores and recognising the exceptional effort of colleagues with special recognition payments”, Sainsbury’s said.
One-off charges of £617m were largely accounted for by the cost of a restructuring announced last November which includes the closure of hundreds of standalone Argos stores.
Shares were nearly 3% lower in morning trading.
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