Sainsbury's, Britain's second biggest supermarket chain, said underlying retail sales soared 8.2% year-on-year in its first quarter to June 27, driven by the country being on coronavirus lockdown for all of the period.
The group, now under the leadership of chief executive Simon Roberts who succeeded Mike Coupe on June 1, said on Wednesday total grocery sales increased 10.5% in the 16 weeks to June 27, its fiscal first quarter, as shoppers returned to big weekly shops and spent more online and in local convenience stores.
Challenges Ahead
"The coming weeks and months will continue to be challenging for our customers and our colleagues and we do not expect the current strong sales growth to continue," Roberts said, noting warm weather had also helped the quarter's sales.
Sainsbury's said it still expected flat underlying pretax profit for the full 2020-21 year, with the impact of COVID-19 expected to be more than £500 million, broadly offset by business rates relief and better grocery sales.
Changing Habits
All of Britain's big four supermarket groups - market leader Tesco Sainsbury's, Morrisons and Asda - have seen grocery sales boosted by the lockdown, but the largest two have benefited the most with their networks of superstores complemented by strong online and local convenience stores playing well with the changing shopping habits of the crisis.
Sainsbury's said its digital sales more than doubled.
Last week Tesco reported an 8.7% rise in first-quarter underlying sales.
For Sainsbury's, whose shares are down 9% so far in 2020, while the pandemic has driven grocery sales it has hit demand for clothing and fuel, with the former down 26.7% in the quarter. It has also pushed its bank into a likely annual loss and raised operating costs across the group.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine
