NEWS


SPECIAL FOCUS ShopTalk S


ainsbury’s has reported strong Q3 and Christmas periods. Chief executive Simon Roberts


said: “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.


“More customers bought their


food online than ever before and we delivered 1.1 million orders in the ten days to Christmas, double the number of last year. “We remain focused on delivering the plan we outlined in November and look forward to providing a further update on early progress at our Preliminary Results in April.” Grocery, general merchandise and


clothing sales were stronger than expected throughout the quarter and particularly since the start of England’s second national lockdown and subsequent increased restrictions throughout the UK. The impact of the pandemic on sales, colleagues and costs adds additional uncertainty to our financial outlook for the remainder of the year.


42 February 2021


However, after forgoing business rates relief of £410 million we now expect to report underlying profit before tax (UPBT) of at least £330 million in the financial year to March 2021 (financial year to March 2020: £586 million). Sainsbury’s delivered strong food sales through the quarter, growing its food market share. Groceries Online sales grew by 128% year-on-year, accounting for 18% of grocery sales. The business has more than doubled the number of slots it can offer for home delivery and Click & Collect. Click & Collect accounted for 24%


of online sales in the key Christmas week. Orders per van continue to increase and pick rates have returned to pre-COVID levels. The company continues to invest


and to have the right stores in the right locations for customers. Six new stores were opened in the quarter, including two new Neighbourhood Hub stores in Bishop’s Waltham and Midhurst.


T


esco has published its trading update for Q3 and Christmas periods. A strong UK sales


performance was sustained into the third quarter with like-for- like growth of +6.7%, accelerating to +8.1% at Christmas following improved customer metrics across all areas.


UK sales grew across all formats,


channels and categories. Online sales growth was particularly marked at


over +80% which equates to nearly £1 billion extra sales over the 19- week period. Large store sales grew strongly as customers favoured larger, less frequent shopping trips. Booker sales over the 19-week period grew by +12.4% including a c.14% contribution from Best Food Logistics which was acquired in early March. Retail continued to perform well throughout the period with sales up +14%. Catering performance has been


strongly correlated to the severity of UK Covid-19 restrictions including a recovery following the ‘Eat Out to Help Out’ scheme leading into the start of the third quarter. As restrictions have tightened, the severity of the decline in the hospitality sector overall led to a fall in our catering sales of (49)% on a like-for-like basis over the Christmas period, compared to around (30)% for the third quarter. We continue to outperform the catering industry as a whole. In ROI, like-for-like sales over the 19-week period grew by +12.1%


with the strongest contribution from our large stores. Sales grew by nearly +70% as capacity increased in response to demand. Like-for-like sales in Central Europe grew by +0.9% in the third quarter, as Tesco continued to strengthen its value proposition and traded over a weaker comparable period due to the re-sizing and simplifying of its businesses last year. Since then, the tightening of Covid-19 restrictions - including curfews preventing evening trading, temporary Sunday trading bans, and restrictions on the sale of non- food – have affected all markets in the region.


In particular, this had a


significant impact on large stores and contributed to a (4.2)% decline in like-for-like sales over the Christmas period.


The strong momentum in the


business and the benefits of sustained elevated sales are enabling Tesco to offset additional Covid-19 costs incurred as a result of the increasing severity of the pandemic since October’s trading update. These incremental costs, such as increased colleague absence, take the current total full year estimate for the UK to £(810)m – an increase of £(85)m since our previous estimate of £(725)m. The business remains confident that retail operating profit is likely to be at least at the same level as in 2019/20, excluding the repayment of business rates relief.


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