Sainsbury’s has revealed that its profits tipped into the negative in 2020 as booming grocery sales were offset by Covid-19 costs.
The Big 4 grocer’s pre-tax profit nosedived to a £261 million loss, down by half a billion from the year previously.
Sainsbury’s attributed the loss on the £485 million it spent safeguarding staff and customers from the Covid-19 pandemic.
The supermarket kept self-isolating colleagues on full pay and raised its hourly wage for store workers to £9.50.
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Profits were also hit by a restructuring in November, which resulted in “one-off costs and impairments.”
Overall sales fell by 0.3 per cent after fuel sales plummeted by 40 per cent year-on-year.
However, grocery and general merchandise sales increased by 7.8 per cent and 8.3 per cent respectively.
Digital sales more than doubled to £12 billion as the supermarket invested millions in bolstering its online operation.
“This year’s financial results have been heavily influenced by the pandemic,” Sainsbury’s chief executive Simon Roberts said.
“Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.
“We are all looking forward to things feeling more normal over the coming months and getting excited about a summer of celebration, but we are also cautious about the economic outlook.”
The news comes after Tesco announced its 2020 profits had dropped by a fifth after being hit by £900 million in Covid-related costs.
