Sainsbury's reports rise in grocery sales and surge in online orders

Sainsbury’s has said it is winning over shoppers from the discounters Aldi and Lidl as well as Tesco, Asda and Morrisons, as it reported a surge in online orders to 650,000 a week in June, up from 370,000 in March.

Sales at its established stores rose by 8.2%, with grocery sales up by 10.5% and general merchandise up by 7.2%, in the 16 weeks to 27 June. Clothing sales were down by more than a quarter as shoppers focused on essentials during their supermarket visits.

Sales in Sainsbury’s convenience stores slid 5%, despite a national switch to more local shopping, as about 600 stores in city centre locations closed at the peak of lockdown while office workers stayed at home. About 25 stores remain closed.

Sales at Argos surged 10.7%, helped by a 78% rise in home deliveries and demand for home office items, garden toys and baking equipment during the lockdown. Argos continued to trade at 300 outlets within Sainsbury’s supermarkets while high street stores were closed, and just over half of sales were picked up in stores.

Despite the sales surge, the chief executive, Simon Roberts, who took over from Mike Coupe last month, said there would be no growth in profits this year as trading in the winter and spring was expected to be challenging. One-off benefits, including the long spell of good weather, were not likely to be repeated while a potential recession could dampen demand for non-food items sold by Argos.

Roberts said: “The situation ahead is very unpredictable. We have made sure the business is ready to handle that.”

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Analysts have predicted a grocery price war, and Roberts said Sainsbury’s had lowered prices on a further 200 products in recent weeks and extended its “price lock” promise to 1,000 items.

He said some of the changes to shopper behaviour seen during the coronavirus lockdown would stick. Shoppers were indicating that they intended to continue to buy more fresh ingredients and cook at home, while half of additional online grocery orders came from new shoppers.

Roberts said Sainsbury’s had increased capacity to deal with online orders by setting up collection points outside stores and had taken on 25,000 extra staff to help pick orders in shops.

“We are continuing to look at what we can do to satisfy demand,” he said. “We need to prepare for substantially more customers wishing to shop online than at the beginning of this crisis.”


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