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Supermarket group J Sainsbury has warned of a £500m hit to profits due to the cost of protecting customers and colleagues during the Covid-19 pandemic, although it expects this to be offset by stronger grocery sales and £450m business rates relief.
It also said weaker fuel, general merchandise and clothing sales, and lower financial services profitability would impact profits.
In its update on the impact of Covid-19, Sainsbury's said its remuneration committee has decided that no cash annual bonuses will be paid to executive directors and the wider senior executive population in for 2019/20.
The supermarket also announced it had deferred any dividend payment decisions until later in the financial year, 'when there will be improved visibility on the potential impact of Covid-19 on the business'.
The supermarket's base case assumes that lockdown restrictions will have eased by the end of its first quarter which is end of June, but that the business will continue to be disrupted until the end of the first half, which is mid-September.
Under this scenario, it expects group underlying pre-tax profit for the year to March 2021 to be broadly unchanged year on year.
The supermarket group also reported its preliminary results for the 52 weeks to 7 March 2020, and announced that underlying pre-tax profit was down 2% to £586m, while pre-tax profit rose 26 per cent to £255m.
Groceries online sales grew 7.6%, while convenience climbed 1.3% and supermarket sales declined 0.1%, impacted particularly by general merchandise sales declines.
During the period, retail underlying operating profit fell 4% to £938m and financial services underlying profits were up by 55% to £48m. At 8:40am: (LON:SBRY) Sainsbury J PLC share price was -4.15p at 203.25p