Sainsbury’s shares down after Q1 update

The price of shares in FTSE 100 supermarket Sainsbury’s (LON:SBRY) dropped by 1.63% to 205.30p (as of 13:05 BST) after it posted a statement for the sixteen weeks ended 27th June. Management said that non-fuel retail sales were up by 8.5% for the period but that COVID would have a large negative impact on profits. Digital sales more than doubled and there has been some recovery in clothing and food sales in recent weeks.

CEO Simon Roberts commented: “Our business has changed fundamentally from four months ago. We have more than doubled our weekly sales of online groceries in recent weeks, SmartShop now accounts for more than half of sales in some supermarkets and Argos sales were strong while operating as an online-only business for almost twelve weeks. Warm weather boosted food sales and sales in seasonal categories in Argos, but sales of clothing and fuel and trading in city centre Convenience stores were all significantly down year on year as a result of lockdown.

“We have worked really hard to listen and to respond to customers throughout the crisis. We have lowered prices on many key products as we continue to focus on lower regular prices. Our price position versus our competitors has improved in the quarter, Sainsbury’s key customer feedback scores are at record levels and we have gained market share.

“The coming weeks and months will continue to be challenging for our customers and our colleagues and we do not expect the current strong sales growth to continue. A number of the decisions we have made have materially increased costs but meant that we have done the right thing for our customers and set us up well for the future“.