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Poor Mike Coupe. For once, Sainsbury’s really is “in the money”. If only the nation’s favourite all-singing, all-dancing executive had stuck around to see it. Instead, it is left for new boss Simon Roberts to enjoy the corona windfall: underlying profit up a quarter from £238m to £301m in the last six months.
Sainsbury’s, like its rivals, is quick to play down the impression that a global health pandemic has been great for business, even if it’s plain for all to see.
The supermarket is desperate to point out that it has racked up £290m of Covid costs, which it says have only been “partially offset” by the Chancellor’s bizarre decision to hand one of the few industries allowed to continue trading during lockdown a generous business rates holiday.
However, it doesn’t take a genius to figure out that they’ve been more than cancelled out by bumper trading. True, it swung to a £137m pre-tax loss, but only on the back of £438m in one-off charges. Group-wide turnover suffered a slight dip too, but again only because fuel sales tanked on the back of tumbling oil prices.
Otherwise, Sainsbury’s has been raking it in: £15bn of turnover; retail sales up 7.1pc; a 6.9pc improvement in like-for-like sales; grocery 8.2pc better; general merchandise 7.4pc higher; and online rocketing 117pc to £5.8bn, meaning digital operations now count for 40pc of total sales, compared with 19pc this time last year.
The reality is that the pandemic has been a once-in-a-lifetime bonanza for the supermarkets. Sure, they’ve “kept the nation fed”, as they are so fond of reminding us, but that’s literally their job, as opposed to some wholesome act of altruism.
The right thing then would be to hand the money back to the Treasury. Instead, it’s going straight to shareholders in the form of two payouts: an interim dividend; and then a special dividend “in lieu of” the final one that was deferred in April.
Roberts insists the two are separate issues, which perhaps is true in the sense that eating and visiting the lavatory are separate but still inextricably linked. It’s a straight input/output equation from accountancy 101, as the numbers show quite neatly: £230m of business rates relief through the door, and £232m back out in dividends. Uncanny.
Still, at least there’s some recognition for all those hard-working staff that have kept the tills ringing during the crisis. Not only his “heartfelt thanks” for “outstanding team effort” but a 10pc “thank-you payment“ too.
That’s unlikely to be much comfort to the 3,500 people about to lose their jobs from the closure of 420 Argos stores and all food counters, though.
Job cuts at a time like this are particularly hard to swallow. Yet, they are even harder to justify when Sainsbury’s admits in the next breath that Argos is the standout part of the group right now: 2m new customers as “people have reconnected” with the chain, it boasts.
True, an 11pc jump in sales came despite every Argos shop being closed, a fairly strong indicator that those stores aren’t needed.
But there’s no getting away from the timing, once again underlining the cognitive dissonance that seems to exist in UK plc. It may be the best way to run a company but it’s certainly no way to treat a workforce that heroically kept turning up day-in, day-out during lockdown.
Still, never waste a good crisis, as they say, and Sainsbury’s certainly hasn’t done that.
Constant U-turns leave Sunak lost
Another day, another Treasury-backed job protection scheme. Yes, we’ve only just had a new one, which replaced the previous version that had taken the place of the one before that, but the latest was almost a fortnight old, so wasn’t it about time for another? The eighth, no less, since the pandemic erupted in March.
It’s fair to say then that the Chancellor’s so-called Winter Economic Plan hasn’t just been torn up, it’s been vaporised, along with what the Resolution Foundation calls his “deeply flawed” Job Retention Bonus scheme.
Of course, more comprehensive support was needed as we enter a second lockdown, so in that sense it is the right move. But the point is that everyone has been telling Rishi Sunak this for weeks yet he chose to ignore those pleas. And those delays, as shadow chancellor Anneliese Dodds points out, “cost livelihoods and lives”.
Sunak’s excuse is that the Government thought “we could stay ahead of the virus”, and the economy was “broadly open, but acting under restrictions”. Yet as he also says, a second wave was always expected. The trouble with repeated U-turns is that eventually you’ll get lost.
Lockdown Britons keep it clean
Reckitt Benckiser is scaling back production of condoms and sexual lubricants so it can ramp up manufacturing of cleaning products and hand sanitiser in this lockdown. Less fornicating and more scrubbing – us Britons know how to make the most of more time indoors.