J Sainsbury PLC (LON:SBRY) confirmed grocery sales have surged during the coronavirus lockdown but cautioned that meeting the demand had also sent costs soaring.
In its final results statement, the supermarket said it is assuming lockdown restrictions will ease by June but the disruption will continue until mid-September.
That would mean costs rising by £500mln, an increase which would be broadly offset by stronger grocery sales and £450mln relief on business rates and making a flat year for profits overall.
In the year just ended, Sainbury’s reported underlying profits of £586mln, down 2%, on flat revenues of £32.4bn
Sales over the past seven weeks though show clearly the impact of the lockdown.
In the period to 25 April , sales rose by 8% overall said the supermarket with a 12% rise in grocery revenues offset by a 53% drop in clothing and 22% in general merchandise. Argos sales rose by 9%.
Going forward, Sainsbury’s said it expects strong grocery sales to continue throughout the period of the lockdown, which will ease to more normal conditions in the second half of the year.
Clothing will be slower to recover with stock clearances also affecting its performance.
There is no final dividend but the supermarket said it had sufficient cash and funding in place for the foreseeable future.
Sainsbury’s added it is to pay all staff who worked between 8 March and 5 April a 10% bonus on hours worked.