Sainsbury's predicts loss of more than £500m profits this year - Daily Mail

Sainsbury's CEO says they sold more food over five days of panic-buying than in its busiest Christmas period - but still predicts coronavirus will cost chain £500m this year

• The supermarket saw underlying pre-tax profits to £586million to March 7
• £500m coronavirus hit will be offset by grocery sales and business rate relief 
• Food sales have exploded in the past six weeks and much busier than Christmas 
• Here’s how to help people impacted by Covid-19

By Martin Robinson, Chief Reporter For Mailonline

Published: 07:28 BST, 30 April 2020 | Updated: 09:04 BST, 30 April 2020

Sainsbury's today warned the coronavirus crisis will cost them £500million over the coming year - but 'crazy' food sales and a state-funded tax break will offset any losses.

Boss Mike Coupe has revealed that for five days running at the start of the lockdown food sales were higher than the busiest shopping days at Christmas leaving shelves largely empty. 

He said he expected 'disruption' for shoppers including social distancing queues outside stores until at least September, adding that up to 25 per cent off staff were either ill or self-isolating in the past six weeks but this is now down to 15 per cent.

Mr Coupe, who will retire as CEO next month, also revealed that that grocery shelf stocks are now at normal levels  - apart from a small number of items including flour - but shoppers are still buying more than usual.

He said: 'We sold more, for five days running, than we would normally sell in our busiest day at Christmas, that's why you saw the gaps on the shelf.  We have seen a very marked change in the way our customers are shopping. They're coming less frequently and are buying about twice as much when they do come. Very much a return to the weekly shop, but beyond it."

He told the BBC Radio 4's Today programme that Sainsbury's customers 'are buying less frequently but are buying more, in fact twice as much’, saying the regular weekly shop has returned.

It came as the supermarket posted a two per cent fall in underlying pre-tax profits to £586million for the year to March 7.  

Sainsbury's shoppers in Bridlington queue at two metre gaps to maintain social distancing as the coronavirus lockdown took hold - as the supermarket revealed customers bought huge amounts of food in the past six weeks

Shelves in stores were cleared as people bought more items than they would at Christmas

British shoppers spent an extra £524m compared with April last year as people have bought more per trip than ever before due to stockpiling during the coronavirus lockdown. Although consumers are heeding Government advice and making fewer trips, they spent 9.1% more in supermarkets in the 12 weeks to April 19

Sainsbury's, No 2 to market leader Tesco, said that the £500million Covid-related costs would would be broadly offset by stronger grocery sales and approximately £450million in business rates relief for retailers.

Supermarket delivery slots 'will rise to 3million in fortnight'

Supermarket delivery slots will increase to almost three million within the next fortnight, the Government has said, amid concerns people who are shielding are being 'fobbed off'.

Conservative David Johnston (Wantage) told the Commons: 'Supermarkets have clearly got a big job on their hands but my constituents who are shielding in Wantage and Didcot are finding their approach inconsistent.

'Some of them are very responsive with dedicated telephone lines and email addresses that get people's issues resolved quickly; others are fobbed off with lines that are never answered and FAQs instead of a tailored response that helps them solve their problem.

'Can [Communities Secretary Robert Jenrick] assure me in his work with Defra he'll push the supermarkets to be consistent in their approach and get the shielded the online delivery slots they really need?'

Mr Jenrick said supermarkets are working 'very hard' to increase capacity, adding: 'I understand at the beginning of the crisis there were typically 2.1m delivery slots in the entire supermarket sector, that's already increased to 2.6m and within a couple of weeks we're told by the supermarkets that will be close to 3m.

'The more capacity they can increase, the easier it will be to broaden out those privilege slots to more members of the public who deserve them.'

That would mean group underlying profit before tax for the year to March 2021 would be broadly unchanged from the £586million pounds reported for the 2019-20 year. 

It saw total grocery sales jump 12% in the seven weeks to April 25, compared with a 2 per cent rise in the final quarter of its previous financial year.

Big falls in clothing and fuel sales because of social distancing and the lockdown would offset surging grocery trade, boss Mike Coupe said today.

The supermarket has scrapped its final shareholder dividend and said decisions on further payouts would be deferred until later in the financial year - a decision which comes after rival Tesco faced criticism for paying out £635 million. 

Sainsbury's full-year results showed a 2% fall in underlying pre-tax profits to £586 million for the year to March 7. On a statutory basis, pre-tax profits rose to £255million from £202million the previous year. 

Presenting his last set of results before bowing out on May 31, chief executive Mike Coupe said the past few weeks had been an 'extraordinary time for our business'.

He said: 'This is an unsettling time for everyone, but I am incredibly proud of the way the business has responded, continually adapting and responding to customer feedback.

'We will continue to work hard to provide food and other essential products to households across the UK and Ireland who are adapting to a new way of living.'

The group saw total grocery sales jump 12% in the seven weeks to April 25, compared with a 2% rise in the final quarter of its previous financial year.         

Total grocery sales jumped as much as 48% higher in the week to March 21 as shoppers stockpiled ahead of the lockdown.

Households shopped for groceries 14 times over the past month - a new record low - and down from 17 times in more normal conditions. But the average spend rose by £7 compared with last year, to £26.02 - the highest figure ever recorded by market researcher Kantar

But total clothing and general merchandise sales, excluding at Argos, have suffered amid the lockdown, tumbling 53% and 22% respectively in the seven weeks to April 25.

The impact on its Sainsbury's Bank financial services arm and weaker fuel sales, as well as the cost of measures to protect staff and customers, is expected to hit its bottom line.

It said its guidance was based on expectations that lockdown will end by the end of June, but that business disruption will continue until the end of its first half in mid-September.

The group cautioned the profits impact could be greater if lockdown is extended further into the summer and if there is a longer-term hit to the wider economy than expected.

 

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiYGh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtODI3MjQ1Ny9TYWluc2J1cnlzLXByZWRpY3RzLWxvc3MtNTAwbS1wcm9maXRzLXllYXIuaHRtbNIBZGh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtODI3MjQ1Ny9hbXAvU2FpbnNidXJ5cy1wcmVkaWN0cy1sb3NzLTUwMG0tcHJvZml0cy15ZWFyLmh0bWw?oc=5

2020-04-30 08:20:06Z
52780756760971