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Sainsbury’s swings to £261m loss as Covid costs rise to £485m

Alongside the group’s recent restructuring, which saw 1,200 job cuts, the grocer also swung to statutory loss before tax of £261m

Sainsbury’s has slumped to a pre-tax loss of £261m, down from a profit of £255m the year before, after it was hit by £485m in Covid-19 related costs during the full-year period ending 6 March 2021.

Alongside the Covid-related costs, the group also attributed the loss to costs arising from its recent restructuring, which saw 1,200 jobs cut across the business.

Group sales were also affected in the period, showing a marginal decrease of 0.3% to £32.28bn, down from £32.39bn the previous year.

However, sales were partially offset by a 120% increase in online food shopping, with the group taking in 850,000 orders a week.

The grocer’s sister business, Argos, also grew its digital sales by 68%, with 90% of sales starting online. In an effort to reduce its operating costs by £105m by March 2024, the group closed 170 standalone Argos stores in the period, as well as the six Argos stores which reside inside Homebase stores. The supermarket said this move fell in line with its plan to reduce the number of Argos stores to 100 over the next three years.

Simon Roberts, chief executive of J Sainsbury, said: “Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.

“We have a bold three-year plan to put food back at the heart of Sainsbury’s and drive improved performance. We are transforming the way we work and I am encouraged by how all of our teams have responded and the early momentum and performance towards our plan.”

He added: “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.”

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