British supermarket group Sainsbury's has today raised its profit outlook after beating its own expectations for trading in the Christmas quarter as Covid-19 restrictions meant people celebrated more at home.
Sainsbury's, Britain's largest grocer after Tesco, said that its like-for-like sales, excluding fuel, rose 8.6% over the 15 weeks to January 2, its fiscal third quarter.
Food, general merchandise and clothing sales were all stronger than it had expected, the group said, driven by England's second national lockdown in November, subsequent increased restrictions throughout the UK and improved online operations.
The restrictions made many customers change their Christmas plans at the last minute, which led to different shopping behaviour.
"Given all of the challenges that everyone's felt, customers wanted to treat themselves," CEO Simon Roberts told reporters.
Smaller gatherings meant Sainsbury's sold smaller turkeys and more lamb and beef than normal, Roberts said.
While grocery sales grew 7.4%, Sainsbury's premium 'Taste the Difference' brand saw an 11% increase and sales of premium champagne soared 52%.
General merchandise sales grew 6%, sales in the Argos division rose 8.4% and clothing by 0.4%.
Online grocery sales jumped 128% and overall digital sales grew 81%, representing 44% of total sales.
After forgoing business rates relief of £410m, Sainsbury's forecast underlying pretax profit of at least £330m for its 2020-21 year.
That is above a forecast made last month of at least £270m, though down from the £586m made in 2019-2020, due to the costs of the pandemic.
As the spread of the coronavirus intensifies, Roberts said rising staff absence rates had reached 8%.
Restrictions to contain the virus mean many people are working from home and the hospitality sector is closed.
Adding to the demand for supermarket goods, many of the five million or so Britons who normally travel abroad for Christmas stayed at home.
Industry data published earlier this week showed all of Britain's supermarket groups benefited from unprecedented Christmas demand as the country's shoppers spent £11.7 billion on groceries in December.
Morrisons and Aldi, Britain's fourth and fifth largest supermarket groups, reported strong Christmas trading earlier this week.