Sainsbury’s has raised its annual earnings forecast despite a decline in sales during the crucial Christmas period.
Total annual retail sales were down 2.9 percent from a year earlier, but food and beverage sales rose 0.1 percent in the six-week period to Jan. 8.
The group said sales of food and beverages have increased due to its efforts to lower prices for customers, which includes a nearly 150 price adjustment with Aldi in its “price matching” campaign.
Sales of its “Taste the Difference” assortment have become popular among shoppers who want to fill up on banquet meals and champagne on the eve of the holiday.
Looking ahead: Sainsbury’s has raised its annual earnings forecast despite a decline in sales during the crucial Christmas season.
The supermarket’s online food sales fell 15 percent a year during the holiday season as demand for delivery declined.
Sainsbury’s said it now expects to make at least £ 720m in pre-tax profit for the year to March, up 9 per cent from the previous forecast.
Excluding fuel, similar sales fell 4.5 percent in the third quarter from January 8 last year and 1.4 percent in the second quarter, according to Sainsbury’s.
However, the UK’s second-largest supermarket chain in terms of market share reported an increase in food sales in the holiday season from six weeks to January 8 compared to the period before the 2019/20 pandemic.
Sainsbury’s noted that the growth of the Omicron option was on track to meet revenue targets as food and beverage sales were better than expected, leading to an increase in supermarkets.
It said that recent strong food sales and cost savings in the business have offset the impact of “high operating cost inflation” and investment in the business.
Grocery sales, excluding fuel, fell 5.3 percent in the last quarter from Jan. 8 to the same period last year, but were 1.4 percent higher than the pre-pandemic level, the grocer said.
Food sales fell 1.1 percent from a year earlier, but were up 6.6 percent from the pre-pandemic level in the last quarter.
Sainsbury’s said sales in the general sales business, including Argos, fell 16 percent in the quarter to Jan. 8.
However, it is noted that the cost reduction at Argos has helped strengthen its profit margin as a result of the group’s decision to close the brand’s 420 branches.
What’s next? Sainsbury’s said it now expects to make at least £ 720m in pre-tax profit for the year to March.
Simon Roberts, CEO of Sainsbury’s, said: “I’m very pleased with how we delivered to customers this Christmas.
“More people are eating at home, and our huge investment in value, innovation and service has led to an increase in market share.
“At the same time, we are pleased to increase our profitability guidance throughout the year.
“The background was very challenging and our teams worked hard to get all the products we needed throughout the year.
“Our suppliers have done well in difficult conditions during the quarter and I thank them for supporting our business.”
The supermarket chain released more than 600 new products in the third quarter, 300 of which were Christmas products.
The grocer said: “Taste the Difference” new products in holiday meals, sweets, wines and spirits were very popular and we had record sales of champagne and sparkling wines. Taste the difference. In the main weeks of Christmas, sales were our fastest-growing product, growing 13 percent in two years.
Sainsbury’s will become the latest UK supermarket to pay shop workers at least £ 10 an hour.
Last week, it announced plans to raise the base salary rate for employees in supermarkets and Argos stores from £ 9.50 to £ 10 an hour from March 6.
Sainsbury’s boss Roberts said the pay rise reflects his success with the fundraising plan.
This is after Morrisons, Lidl and Aldi, who announced similar moves last year.
New Life: On Tuesday, Marks & Spencer was revealed to be the UK’s fastest-growing food retailer on Christmas Eve.
Commenting on today’s results, Richard Hunter, head of Interactive Investor Markets, said: “Overall, skepticism could benefit Sainsbury’s. led to an increase in the annual profit target from £ 660 million to £ 720 million.
The rise in earnings confirms a relatively strong price index, with shares up 15 percent year-over-year for the broader FTSE100. It remains to be seen whether the improved forecast is sufficient to increase the market consensus of the shares currently held.
Richard Lim, CEO of Retail Economics, said: “These are very encouraging numbers that describe a disgruntled consumer who prioritizes Christmas gatherings despite growing concerns about the virus. Food sales are better than last year. was (given the restrictions in 2020) as more family gatherings took place and consumers switched to premium lines.
“To ensure a Christmas-free Christmas, many people have limited their social connections on the eve of the big day and increased home-cooked meals to the detriment of the hospitality sector. llab-supported.
“The retailer is also well positioned to cope with the growth of online food sales, which has invested heavily in capacity and efficiency over the past two years. helped to double it.
Shares of Sainsbury’s, which is listed on the FTSE 100, are up today and up 3.33% before 4:30 p.m., or from 9.40p to 288.60p.
On Tuesday, an independent report revealed that Marks & Spencer was the UK’s fastest-growing food retailer on Christmas Eve as shoppers returned to the main street after last year’s blockade.
In 2020, the lost brick and mortar vendor, whose stores were located on major streets or in closed tourist centers, surpassed Aldi and Lidl discounters, whose sales growth was more than 9 percent per year. 12 weeks to December 26th.
The figures were provided by NielsenIQ analysts and based on a survey of more than 14,500 households. M&S only started selling food online through Ocado in August 2020.
Lidl, which sells almost no groceries on the internet, became the fastest-growing retailer with 8.5 percent in three months as it opened eight new stores in December. Aldi, who claimed to be the UK’s best performer on Christmas Eve, was up 4.8 per cent, helping to open new stores.
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