Sainsbury’s sales boosted by online growth

Sainsbury’s has welcomed a “particularly strong” online performance in its first quarter of trading, as online sales more than doubled, rising 87% year-on-year. 

From the start of the crisis, online orders rose from 370,000 to over 650,000 per week, and nearly 50% of new online groceries customers were reported as new Sainsbury’s customers.

Over the period, total retail sales rose by 8.5%, while like-for-like sales were up by 8.2%.

The supermarket giant also reported “strong grocery momentum” in the trading period, with total grocery sales up by 10.5% in the quarter ended 27 June. 

While total clothing sales were down by 26.7%, general merchandise sales increased 7.2% in the period. Argos in particular “performed well”, with a 10.7% rise in sales.

Despite predicting that the profit impact of Covid-19 may be more than £500m, Sainsbury’s ensured that this would be “broadly offset” by both business rates relief and its strong grocery sales in the period. 

Nonetheless, the group warned that it was “appropriate to remain cautious” regarding the sales trajectory through the remainder of the year.

In addition, it expects a “likely further weakening of consumer spending” as the year goes on.  It said it remains “impossible to predict the full nature, extent and duration of the impact of Covid-19 on sales and costs”. 

Simon Roberts, CEO, said: “Our business has changed fundamentally from four months ago. We have more than doubled our weekly sales of online groceries in recent weeks, SmartShop now accounts for more than half of sales in some supermarkets and Argos sales were strong while operating as an online-only business for almost twelve weeks. 

“Warm weather boosted food sales and sales in seasonal categories in Argos, but sales of clothing and fuel and trading in city centre convenience stores were all significantly down year on year as a result of lockdown.” 

He added: “The coming weeks and months will continue to be challenging for our customers and our colleagues and we do not expect the current strong sales growth to continue. 

“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.”