6th Jul 2021 08:03
(Alliance News) - J Sainsbury PLC on Tuesday said its first quarter sales rose, and the grocer raised its annual profit forecast, despite injecting GBP50 million to lower supermarket prices and stave off competition.
In the 16 weeks to June 26, retail sales, excluding fuel, rose 1.6% yearly and 10% on two years earlier, before the onset of the pandemic. On a like-for-like basis, sales were also up 1.6%. Including fuel, total sales jumped 8.5% annually, or 8.4% on a like-for-like basis.
Grocery sales alone climbed 0.8% year-on-year, sitting 11% higher than pre-pandemic levels. Online sales surged 29% yearly in the first quarter, more than double what they were two-years earlier.
Meanwhile, clothing sales rose 58% yearly, while general merchandise sales were 1.4% weaker.
"Sales of grocery, general merchandise and clothing were all higher than our expectations throughout the quarter. Grocery sales benefited from higher in-home consumption due to continued Covid-19 restrictions. In addition, we continued to outperform competitors and grow market share," Sainsbury's explained.
Sainsbury's said it is using some of the profit boost from its sales outperformance to drive investment plans, particularly to improve its value position, meaning lower prices. It also noted tough comparatives ahead as lockdown restrictions continue to ease.
Even so, it now expects to report underlying pretax profit of at least GBP660 million in the financial year to March 2022. Back in April, alongside the release of its annual results, Sainsbury's said it expected underlying pretax profit in the 2022 financial year to exceed the GBP586 million reported in the 2020 financial year, and was "comfortable" with consensus of around GBP620 million.
On Monday, the company said it will invest GBP50 million into the price of its products in a move which will make dozens of popular items cheaper for shoppers. The supermarket chain said the move will see 60 core fresh produce, meat and dairy products cut in price by the end of the month.
Chief Executive Simon Roberts added on Tuesday: "From today we are reducing prices by GBP50 million on everyday products from strawberries and cherries to bacon and potatoes, helping customers make the most of this summer. I'm delighted that customers are responding to the changes we are making and that we are growing our market share."
Shares were up 0.4% at 279.41 pence in London early Tuesday.
By Eric Cunha; [email protected]
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