Sainsbury's suffers huge Covid blow

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Costs incurred by Covid have pushed British supermarket group Sainsbury's into a loss of 261 million pounds (300 million euros) last year, while turnover stagnated overall.

 

Turnover stays the same

Sainsbury's was unable to capitalise on the run on its supermarkets during the Covid pandemic. While the number two in the British supermarket landscape saw food sales rise by 7.3 % and online sales even doubled, the total group sales remained stable as customers refuelled less at the group's petrol stations and clothing sales fell by 9 %. Turnover for the full financial year, which ended on 6 March, thus remained at 29 billion pounds (33 billion euros) - the same as a year earlier.

 

Despite growth in its supermarkets, Sainsbury's posted a substantial loss of 261 million pounds (300 million euros). To keep both staff and customers 'Covid safe', the company spent a total of 485 million pounds. In addition to security equipment, this figure includes extra bonuses for staff, replacement costs for quarantined staff and compensation for vulnerable employees who had to stay home.

 

Expensive dividends

The fact that Sainsbury's, like other supermarkets, has felt obliged to repay millions of pounds in government aid has not helped either. The chain was entitled to tax rebate of 440 million pounds last year, but several retailers subsequently came under fire for still paying dividends to shareholders. 

 

In exchange for 232 million pounds in dividends, the chain returned the 440 million to the treasury. Again, the group ruled that "shareholders should not bear the full short-term impact of the effect of Covid-19 on the business", according to The Guardian, and a final dividend will follow.

 

For this year, Sainsbury's already expects increased profit numbers but otherwise remains "cautious" about the economic outlook. Nevertheless, the group is gearing up for a festive summer in which customer behaviour should finally start to normalise.