Sainsbury’s records £330million profit for 2020 after Christmas and Black Friday trading surge with 1.1MILLION online orders in the 10 days before Christmas
- Britain’s second largest supermarket chain thought profit would be £60m lower
- Huge sales from Black Friday and just before Christmas catapulted revenue up
- Sainsbury’s also owns Argos, which saw sales rise 8.4% in past three months
Sainsbury’s has such strong Christmas sales its profits for the year will be £60million more then expected as the pandemic continued to be good for food stores, it was revealed today.
Britain’s second largest supermarket chain, which also owns Argos, said its underlying pre-tax profits for the year are now expected to hit £330million compared with £270million previously predicted.
Grocery sales were also strong – up 7.4%, with online business up 128% as 1.1 million online orders for food were delivered in the 10 days leading up to Christmas, the supermarket said.
A bumper Christmas and Black Friday has helped Sainsbury’s make £50million more than expected
The profit upgrade comes as the supermarket said sales in the three months to January 2 soared 8.6% on a like-for-like basis, helping profits surge.
Sales over the Christmas period – the nine weeks to January 2 – were particularly strong, growing 9.3%.
Sainsbury’s said Christmas and Black Friday sales beat expectations, as stores benefitted from the national lockdown in England in November and the subsequent tiering, which allowed non-essential stores including its Argos business to trade on a click-and-collect basis.
Non-food sales grew by 6%, with Argos sales up 8.4% in the three months to January 2.
Online sales are through the roof with 1.1million online deliveries in ten days before December 25
Chief executive Simon Roberts said the tighter Christmas restrictions saw customers turn to smaller turkeys and an increase in lamb and beef sales, but shoppers treated themselves to more premium products.
He said: ‘While people had smaller gatherings, they still treated themselves, with Taste The Difference sales up 11%.
‘Premium champagne sales were up 52%, Taste The Difference party food was popular throughout December, and people did more home baking than usual, with mincemeat sales up 24%.
‘Customers still wanted New Year’s Eve at home to feel special and we sold a record number of steaks.’
Mr Roberts added: ‘Argos sales were up over 8%, with fast-track home delivery and click and Collect beating expectations for Black Friday and Christmas.’
The supermarket declined to reveal how its 800 convenience stores have performed, but confirmed overall sales in those sites had fallen.
Central London stores have seen the worst performance, but there has been an increase in sales and bigger basket sizes in sites in residential areas. The company did not reveal how badly overall sales fell.
Since the introduction of a third national lockdown in England, the boss also revealed absence levels are lower than they were in March but are starting to rise.
He said: ‘We’re very much making sure we’re putting all the policies in place to support colleagues who need to shield at home.’
He added: ‘At the moment we’re averaging around 8%. That’s where we are today. We’ve seen a step up in the last few days.’
Bosses also called on the Government to use Covid-19 to hold a major review of business rates, but fell short on demanding the Treasury extend a business rates holiday beyond April to support struggling high streets.
Mr Roberts said: ‘We’ve long held the view that business rates need to change. The Government have committed to do a review, and we fully encourage and support it. Covid has to be the catalyst for a change in the way business rates have been working.
‘A business rates review is absolutely critical and very important.’