Sainsbury's suffer pre-tax loss despite increased sales

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During the first half of 2020, Sainsbury’s saw total retail sales increase 7.1% with all grocer sales up 8.2% but despite this the supermarket has suffered a pre-tax loss.

Underlying pre-tax profits initially increased 27% to £301 million but the business saw retail costs of around £290 million that were spend on ensuring the safety of their staff and customers during the COVID-19 pandemic. These costs were said to have been offset by £230 million of business relief rates but the company have suffered other costs which has meant that the business saw a pre-tax loss of £137 million in that period.

The company saw total retail sales and grocery sales increase, but it was online sales that has rocketed in the first half. Total digital sales increased by 117% to £5.8 billion which made up 40% of the company’s total sales, online groceries sales increased 102%.

In the announcement of their half year results, Sainsbury’s has detailed some further business plans which include plans to lower food prices, triple new product launches per year and grow the online grocery capacity to meet the current demand. They plan to open 100 new convenience and neighbourhood hub stores over the next three years with the anticipation of closing 15 to 20 supermarkets and 50 to 60 convenience stores.

The company has also pledged that they will invest £1 billion over a 20-year period to achieve a net zero company by 2040. The company have also stated in their half year results that they aim to continue to reduce plastic and food waste as well as hoping to inspire their customers to eat a healthier diet which in turn helps to better the climate and environment as they work towards their net zero mission.

Sainsbury's CEO Simon Roberts said: “We will put food back at the heart of Sainsbury’s. We are already working to make this happen – we have lowered prices on over 1,500 every day grocery products over the past few months and we will do more of this, focusing on the staple products that our customers buy every day. We know that customers are feeling the pinch and we want them to feel confident they will get always get great value, quality, and service from Sainsbury’s.

"COVID-19 has accelerated a number of shifts in our industry. Investments over recent years in digital and technology have laid the foundations for us to flex and adapt quickly as customers needed to shop differently. Around 19 per cent of our sales were digital compared to this time last year and nearly 40 per cent of our sales are digital today.”

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