The revenue boom for main distributors continues as Covid cuts and closures improve trade
Over Christmas and the New Year, growing sales of champagne, steaks and premium goods helped Sainsbury’s produce strong growth, while discount retailer B&M also posted major gains as sales stayed strong at critical retailers.
Sainsbury’s announced that like-for-like sales improved year-over-year over the Christmas period from Nov. 1 to Jan. 2 by a stronger-than-expected 9.3 percent.
Sales at B&M’s U.K. Like-for-like In the three months to Boxing Day, stores rose 21.1 percent, and the retailer revealed it would offer an additional week’s pay to 30,000 employees.
During the coronavirus pandemic, supermarkets were one of the biggest winners of increased spending, as stranded consumers spent more money on food they normally would have spent elsewhere.
A major sales rise was announced on Tuesday by Morrisons, while Kantar retail analysts said December was a record month for the U.K. Grocery shops. This has contributed to increasing revenue, although substantial increased expenses for the implementation of social distancing initiatives have held back revenues.
Online purchases have boomed at the same time.
Sainsbury’s announced that in the 15 weeks ended Jan. 2, online grocery sales grew 128 percent year-over-year.
In the 10 days leading up to Christmas, Sainsbury’s shipped 1.1 million orders, twice as many as last year.
Sainsbury’s, the third-largest supermarket in the U.K., increased its profit outlook and said it now expects to make at least £ 330 million in adjusted profit before tax in the fiscal year to March 2021.
On Thursday, the company was the biggest riser on the FTSE 100, with early trading shares up more than 5 percent.
The gains are also anticipated after a late deal by the retailer to repay £ 410 million in tax relief provided by the government at the start of the pandemic. The relief had been granted with the intention that supermarkets and other retailers would suffer, but revenue rises were announced instead by the critical stores that remained open.
After a public uproar, Sainsbury’s, B&M and a host of other stores only agreed to repaying the relief.
Sainsbury’s said premium champagne sales were up 52 percent, while party snacks were up 11 percent under its premium ‘Taste the Difference’ brand. In the run-up to New Year’s Eve, the supermarket also posted a record number of steaks sold, as UK shoppers mostly stayed at home.
During England’s third national closure, Simon Roberts, chief executive of Sainsbury’s, said the company is “again facing a lot of change and uncertainty” but added that there are prospects for 2021.
Another of the most famous winners was B&M, which sells products ranging from frozen food to plants and housewares. While the discount retailer does not offer goods online, the change in spending away from non-essential stores has also benefited from it.
The rapidly growing distributor, which has 673 stores in the U.K. For the last quarter, and 104 in France, revenues of £ 1.4 billion were announced, up 23 percent from a year earlier.
Sales hit £ 3.6 billion for the first nine months of the fiscal year, up almost a quarter from a year ago.
B&M reported that it would offer an additional week’s pay as a bonus to 30,000 workers, while shareholders will earn a dividend payout of £ 200 million.
The new closure brought confusion, said Simon Arora, B&M’s chief executive. He added, however, that he was confident in the low prices of the store and its emphasis on out-of-town markets, which have regained popularity as clients try to escape crowds.