Sainsbury’s has warned of a coronavirus hit of more than £500 million to the current year’s profits as it said social distancing measures together with falls in clothing and fuel sales would offset surging grocery trade.
The retailer said the impact of Covid-19 is expected to leave underlying pre-tax profits broadly flat for the year to March 2021, despite £450 million in business rates relief.
It has scrapped its final shareholder dividend and said decisions on further payouts would be deferred until later in the financial year.
Sainsbury said that its forecasts assumes that lockdown restrictions will have eased by the end of our first quarter (end June), but that the business will continue to be disrupted until the end of the first half (mid-September).
Mike Coupe, Chief Executive Officer, said:
“The last few weeks have been an extraordinary time for our business. First and foremost, I want to say thank you to all of our colleagues. They have shown outstanding commitment and resilience over the past few weeks and I am in awe of their adaptability and the efforts they have made to continue to serve our customers. Across every part of the business, colleagues have played their part as we have done everything possible to feed the nation and to prioritise those who are least able to access food and other essential services. This is an unsettling time for everyone, but I am incredibly proud of the way the business has responded, continually adapting and responding to customer feedback. We will continue to work hard to provide food and other essential products to households across the UK and Ireland who are adapting to a new way of living.”
