Sainsbury’s has credited a surge in sales in the run-up to Christmas for an upgrade to its annual profit forecast.
The UK’s second-largest supermarket chain by market share said underlying pre-tax profits for the year to March were now tipped to hit £330m – a rise of £50m on its previous expectations.
That came despite the company’s decision to follow Tesco and its other grocery rivals in handing back business rates relief thanks to the industry’s essential status during the COVID-19 crisis that has boosted business during tiered restrictions and national lockdowns.
In Sainsbury’s case, it gave up £410m of government aid.
The group, which includes Argos, reported a like-for-like rise in sales of 8.6% in the 15 weeks to 2 January – hitting 9.3% over the core Christmas season.
The company, which has hired 68,000 staff during the crisis to date to help manage demand for orders, said its online business was up 128% as 1.1 million orders for food were delivered in the 10 days leading up to Christmas.
Non-food sales grew by 6% over the 15 week period. Shares rose by 5% in early deals.
It updated the market days after Aldi and Morrisons revealed similar uplifts for sales over the festive season.
Industry data has suggested the latter was the only one of the so-called ‘big four’ chains to grow its market share over Christmas amid signs that the price war of recent years is to set to intensify.
Sainsbury’s chief executive Simon Roberts said of the performance: “We made a strong start to delivering our Food First plan and we are also clear on the opportunities to further improve our offer as we look ahead for 2021.
“At Christmas we focused on offering our customers great prices, great quality and great service and I feel really proud that Sainsbury’s customer satisfaction scores were the highest ever in the key Christmas week.
“We have started the new year with a strong value offer, with Price Lock currently on over 2,500 everyday products.”