Sainsbury’s latest financial release indicates the company’s profits plunged for the year ending 6 March due to costs related to COVID-19, but its grocery and online sales spiked.
The company’s underlying profit before tax dropped 39 percent to GBP 356 million (USD 497 million, EUR 409 million), due to GBP 485 million (USD 677 million, EUR 558 million) in costs related to COVID-19.
In addition to pandemic expenses, the retailer’s loss before tax of GBP 261 million (USD 364 million, EUR 300 million) predominantly reflects “one-off costs and impairments associated with strategic changes announced in November,” the retailer said in a press release.
Last November, Sainsbury’s announced it was closing its meat, fish, and deli counters, “based on reduced customer demand.” It also said it would eliminate 3,000 positions, primarily in J. Sainsbury’s Argos business.
“This will make stores simpler to run and reduce food waste. We will keep adding more quality and innovation in our aisles,” the retailer said. Sainsbury’s said its efforts included lowering food prices and growing its online grocery sales to meet increased demand.
Some of those initiatives are already bearing fruit. Digital sales soared 102 percent, while grocery sales rose 7.8 percent and general merchandise sales rose 8.3 percent over the past year, the company reported.
“We have made good early progress with the plan we announced in November to put food back at the heart of Sainsbury’s. We are changing at pace, making bold decisions, and investing in the areas that matter to customers, underpinned by an accelerated cost-saving program,” Sainsbury’s said.
Sainsbury’s said it has improved the value of its food ranges, “lowering the prices of the products that matter most to customers and extending our Price Lock price commitment.”
By changing its ways of working and its supplier relationships, Sainsbury’s said it will triple its new product offerings to 1,900 products within the next year.
Similar to Sainsbury’s, Tesco’s profit before tax fell to GBP 825 million (USD 1.2 billion, EUR 949 million) for the fiscal year, compared to GBP 1.03 billion (USD 1.4 billion, EUR 1.1 billion) for the 53 weeks ending 29 February, 2020.
Photo courtesy of Sainsbury’s
