Sainsbury’s warns of electronics shortage this Christmas

Supermarket says it is in ‘good position’ despite supply chain woes, as it reveals jump in profits

Sainsbury’s has revealed a jump in half-year profits (PA) (PA Wire)

Sainsbury's has warned of a shortage of consumer electronics this Christmas due to ongoing problems with the global supply of chips.

Chief executive Simon Roberts said electronics was one of a number of areas where less stock is available than he had expected but added that Sainsbury's was "well placed" in the run-up to Christmas.

Electronics makers have been battling with a lack of microchips due to surging demand during the pandemic and the shutdown of factories last year. Sony PlayStation consoles have been in short supply all year and car manufacturers have been forced to scale back production.

Supplies of a host of goods have also been hit by shortages of labour and a backlog on global shipping routes.

Sainsbury's has chartered its own ships to help reduce disruption to imports of some products. The company has also sent its own drivers to suppliers.

"Our industry faces labour and supply chain challenges," Mr Roberts said.

"However our scale, advanced cost-saving programme, logistics operations and strong supplier relationships put us in a good position as we head into Christmas."

Retailers have been impacted by supply chain disruption and a lorry driver shortage that has led to gaps on shelves. Sainsbury's’ biggest competitor, Tesco, said last month that it had remained "resilient" in the face of supply chain problems. Next reported this week that stock availability had begun to improve.

Last week, Sainsbury's wrote to customers to attempt to reassure them that there would be plenty of stock available for Christmas.

Mr Roberts said: "Whilst customers are returning to many pre-pandemic shopping habits, online sales have remained very strong and we continue to grow market share."

The warning came as Sainsbury's revealed a jump in half-year profits despite its a 12 per cent slump in revenues at its Argos business. Underlying profits rose 23 per cent to £371m for the 28 weeks to 18 September.

Like-for-like group sales, excluding fuel, rose 0.3 per cent in the first half of the year, but slipped 1.4 per cent in the second quarter.

Sainsbury’s blamed "supply challenges, unseasonal weather and lower demand for home office equipment and technology" in the second quarter.

General merchandise sales dropped 8 per cent in the second quarter, as it came up against a tough quarter a year ago when demand was boosted amid pandemic restrictions.