SAINSBURY’S has posted strong trading results for the past quarter under lockdown with digital sales more than doubling.
The supermarket group, which operates around 100 stores in Scotland, said total sales jumped by 8.5 per cent for the 16 weeks to June 27 amid high demand for store-cupboard essentials.
It said it expects profits to take a hit of more than £500 million due to the impact of the coronavirus pandemic, although this will be “broadly offset by business rates relief and stronger grocery sales”.
However, Simon Roberts, its new chief executive, warned investors “we do not expect the current strong sales growth to continue” as he stressed that the coming months would continue to be challenging.
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Mr Roberts said: “The last four months have been extraordinary in so many ways and our colleagues have done an amazing job adapting our business.
“They have worked tirelessly to keep everyone safe, to help feed the nation and to support our communities and the most vulnerable in society.
“A number of the decisions we have made have materially increased costs but meant that we have done the right thing for our customers and set us up well for the future.”
Grocery sales surged 10.5% during the quarter as online grocery orders rose to 650,000 per week from 370,000 for the same period last year.
Sainsbury’s also reported a 7.2% increase in general merchandise sales as it was boosted by strong figures in its Argos business despite stores being shut for most of the quarter.
Argos sales increased by 10.7% as it was boosted by a 78% jump in home delivery sales, while click-and-collect sales increased by 53%.
Shoppers bought fewer clothes from the business during the period, with sales sliding by 26.7%.
Julie Palmer, partner at Begbies Traynor, said: “Simon Roberts may have only just got his feet under the table at Sainsbury’s, but the chief executive is facing the task of navigating the supermarket through the murky economic waters of Covid-19.”
She said “Sainsbury’s remains in a stable position with the company’s acquisition of Argos improving its online offering, which has proven fruitful during lockdown”.
John Moore, senior investment manager at Brewin Dolphin, said: “Supermarkets have been relatively resilient throughout the pandemic, as one of the few businesses that can continue to operate meaningfully, but the key questions from here are around costs and business adaptability in a changing retail environment.
“There is still work to do for Sainsbury’s, but it meets these challenges in good financial shape.” Shares closed at 203.2p, down 2.6%.
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