Sainsbury’s £500m on pandemic staff costs hits profits

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Supermarket chain Sainsbury’s spent almost £500m on protecting staff and customers during the pandemic, contributing to a £261m annual loss despite a huge increase in sales.

Reporting its annual results today, the company said it spent £485m on special bonus payments for staff who worked through the pandemic, extra staff to cover those who were isolating, payments for vulnerable staff who had to shield at home and additional in-store safety measures.

Its online sales more than doubled in the year to 6 March as customers avoided physically visiting stores during the early months of the pandemic. However, sales of clothing and petrol declined as customers stayed at home more, meaning overall revenue was flat at around £29bn.

Simon Roberts, Sainsbury’s chief executive, said: “Above all else, I want to recognise the extraordinary job that my colleagues have done over the last 12 months. Their efforts have been nothing short of heroic as our entire team went above and beyond every day for our customers and communities. I am enormously grateful to the whole team for the way they have risen to the huge challenges this year and so selflessly looked after our customers and each other.

“We have put our colleagues and customers first every step of the way and, as a result, delivered industry-leading safety in our stores and record levels of customer satisfaction.

“Food and Argos sales are significantly higher but the costs of keeping colleagues and customers safe during the pandemic has been high.”

In the year to March 2020, Sainsbury’s recorded a £255m pre-tax profit, making this annual loss significant in comparison.

Last month, the company announced a restructure that could put 1,150 jobs at risk. It has begun a consultation on removing 500 office-based roles and 650 other roles, with proposals to close an online delivery warehouse in east London.

The proposals could also impact the retailer’s HR, commercial, supply chain and technology teams, it said, while plans to increase its online sales capabilities could also place up to 3,000 retail store jobs at risk.

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