Sainsbury's shares jump after supermarket reveals bumper Christmas

Tom Belger
·Finance and policy reporter
·2-min read
Shoppers at a Sainsbury's store in Leamington Spa, West Midlands.
Shoppers at a Sainsbury's store in Leamington Spa, West Midlands. Photo: PA.

Sainsbury’s (SBRY.L) shares leapt on Thursday as it raised its profit forecasts after sales surged 9.3% in the run-up to Christmas.

The leading supermarket chain now expects underlying pre-tax profits of at least £330m ($449m) in its financial year to March.

The new guidance marks a £60m boost on forecasts released just a month earlier, with Britain’s last-minute Christmas upheaval boosting sales more than expected.

It comes a day after industry data showed supermarkets enjoyed their biggest Christmas on record, with COVID-19 doubling the share of online sales.

Sainsbury’s highlighted the impact of customers having to change their festive plans at the last minute, as COVID-19 cases surged and restrictions were tightened.

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READ MORE: Biggest Christmas on record for UK supermarkets

“We sold smaller turkeys and more lamb and beef than normal. While people had smaller gatherings, they still treated themselves, with Taste the Difference sales up 11%,” said chief executive Simon Roberts in its third-quarter trading update on Thursday.

Premium champagne sales surged 52%, a trend also seen in other supermarkets, while home-baking boosted mincemeat sales. “Customers still wanted New Year's Eve at home to feel special and we sold a record number of steaks,” Roberts added.

Sainsbury's shares jumped on a strong update on Thursday (7 January). Chart: Yahoo Finance UK
Sainsbury's shares jumped on a strong update on Thursday (7 January). Chart: Yahoo Finance UK

Online orders hit a record high in the 15 weeks to 2 January, up 81% on a year earlier to make up 44% of total sales. Sainsbury’s delivered 1.1 million orders in the 10 days before Christmas alone.

Sainsbury’s expected full-year profits come in spite of the retailer joining other major supermarkets in handing back £410m in business rates relief.

READ MORE: Morrisons sales surge during record-breaking Christmas

Earnings of £330m would still mark a significant decline on 2019 however, when the company generated £586m in profits.

Sainsbury’s stocks were up more than 4% in early trading in London on Thursday.

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