Sainsbury’s slumps to £261m loss on back of Covid costs | J Sainsbury

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Sainsbury’s has dived to a £261m annual loss despite booming sales of groceries during the pandemic as it spent millions of pounds on protecting staff and customers from the coronavirus.

The UK’s second biggest supermarket said it had spent £485m on special bonus payments for staff who worked through the pandemic, extra staff to cover those who were isolating, additional safety measures in stores and pay for vulnerable staff who had to stay at home.

Online sales more than doubled in the year to 6 March, with grocery takings rising 7.3%, and general merchandise sales, which include the Argos chain, up by just over 9%.

But Sainsbury’s said total sales remained almost flat at £29bn as drivers put less petrol into their cars during the lockdowns and clothing sales slid almost 9%.

The company’s hefty annual loss came after a £255m pre-tax profit a year before. Sainsbury’s said it was on track to exceed 2020 profits in the year ahead.

The company said it had started the year strongly but was “prudent” about the months ahead when it expected customer behaviour to normalise.

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“This year’s financial results have been heavily influenced by the pandemic. Food and Argos sales are significantly higher but the costs of keeping colleagues and customers safe during the pandemic has been high,” said Simon Roberts, the chief executive.

He said Sainsbury’s was “getting excited about a summer of celebration” but was also “cautious about the economic outlook”.

Sainsbury’s slide into the red comes after it joined other supermarkets in returning millions of pounds of business rates relief after criticism. Sainsbury’s paid back £440m of the property tax relief last year but said it was also paying a final dividend as “shareholders should not bear the full short-term impact of the effect of Covid-19 on the business”.

Total dividends paid during the year were £232m compared with £247m a year before.

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Source: The Guardian
Keyword: Sainsbury’s slumps to £261m loss on back of Covid costs | J Sainsbury

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