Sainsbury’s has warned of gaps on shelves as supplies of some products including salads, beers and soft drinks run low because of shortages of lorry drivers and an uptick in staff forced to self-isolate because of covid-19.
Supplies of some non-food items has also been hit by global supply chain challenges caused by shortages of shipping containers, interruptions at factories and a shortfall in computer chips caused by surging demand for electronic equipment.
Simon Roberts, the Sainsbury’s chief executive, said demand for soft drinks, beer and barbecue foods had all been stronger than expected in recent weeks as families continue to eat more at home and friends gather around their television sets to watch the Euro 2020 football tournament.
“As customers are spending more time together for the big events we have seen demand respond as a result,” he said.
Beer sales have surged 60% above normal levels since the tournament began, the UK’s second largest supermarket group said, with Sainsbury’s selling 17 packs of beer a second on Saturday as England fans stocked up for the quarter-final match against Ukraine.
Roberts said there had been problems with items such as salad packs and certain brands of beer and soft drink, and the company was “not getting every product through” because of driver shortages. But he said Sainsbury’s was managing to bring in a range of different items so that “in areas that customers want to buy we have got availability”.
In an update on trading, Sainsbury’s said it now expected to make annual profits of £660m, £40m more than previously forecast, as sales at established stores rose 1.6% year on year, excluding fuel, in the four months to 26 June.
That growth was underpinned by a 0.8% year-on-year rise in grocery sales, despite trading against a very strong period a year before when the nation was stockpiling food in the early days of the pandemic. Sales were 11.3% more than two years ago.
Online grocery sales rose 29% as many families who switched to ordering from home during the pandemic continued to do so. Sainsbury’s said it had gained market share from its big rivals as it cut prices on key items and promised to match the prices of discounter Aldi on certain lines.
Clothing sales soared almost 58% as a return to socialising and work, as well as warm weather, led demand for new outfits.
“Sainsbury’s faced an extremely hard act to follow in the past three months compared with a year ago when many people were panic buying in the early stages of the pandemic,” said Russ Mould, the investment director at AJ Bell.
“This makes it all the more impressive that the company has managed to chalk up growth for the period and confirms the attractions of a UK groceries space which was recently reflected in the multibillion-pound bid for Morrisons.”
Sales at the group’s Argos chain were down 3.7% as demand for consumer electronics and gym equipment fell compared with a year ago when households were adjusting to lockdown living.
Sainsbury’s share price rose less than 1% despite the profits upgrade. The chain had a strong run in recent days prompted by hopes it could be next in line for a private equity-led takeover bid after the £6.8bn buyout of Asda and a £6.3bn agreed offer for Morrisons at the weekend.
Roberts said the Sainsbury’s management team was “absolutely committed to driving through the value we see in the business” and indicated there were no firm offers on the table for the group.
“If we had anything to update on we would be updating on it,” he said when asked if Sainsbury’s was in talks with potential suitors.
