Sainsbury’s holds talks with Government over shipment delays in Red Sea

The boss of Sainsbury’s has said the supermarket giant has held “regular calls” with the Government over potential disruption as a result of shipments avoiding the Red Sea following a series of attacks.

Simon Roberts, chief executive of the retailer, said shipments of wine and general merchandise, which includes electricals, were among those facing delayed journeys.

In recent weeks, attacks by Houthi rebels on ships in the Suez Canal have seen the world’s largest shipping firms halt shipments through the Red Sea, adding thousands more miles to journeys.

Last week, fashion retailer Next said stock deliveries and sales could be affected if the attacks continue to disrupt the vital shipping route.

Sainsbury’s boss Mr Roberts said the business is working hard to reduce potential disruptions and costs from redirected shipments.

“Through the last three or four weeks our team have spent time working out how to get the impact to an absolute minimum,” he said.

“The vast majority of container ships are instead going around the Cape of Good Hope which is making journeys 10 to 14 days longer.

“We are working on our sequencing of orders to ensure we always have good availability in product areas which can travel through these routes, such as general merchandise and wine.

“Getting products from across the world is an important issue for the Government, so we are on regular calls to make sure we have the latest intel and understand the potential impacts.”

It came as Sainsbury’s revealed a jump in sales over the key Christmas period, with shoppers buying bigger volumes of products as food and drink inflation slowed down.

However, the firm witnessed a drop in trade for clothing and in its Argos business.

The UK’s second largest supermarket chain said total retail sales, excluding fuel, grew by 4.9% over the six weeks to January 6, with grocery sales rising by 8.6%.

Over the past year, grocery revenues have been boosted by higher prices, as food manufacturers have passed on cost increases to many customers.

But on Wednesday, Sainsbury’s said it saw shoppers purchasing more products amid “lower inflation” over the latest period.

The chain said its customers bought record numbers of pigs in blankets, mince pies and sparkling wine over Christmas.

The strong grocery performance helped to offset a 4.2% decline from Argos – driven by the closure of its Argos Ireland business – and a 6% fall for Christmas clothing sales.

It came as total retail sales, excluding fuel, grew 6.5% over 16 weeks to January 6.

Grocery sales were 9.3% higher for the full quarter.

Mr Roberts said: “We enter 2024 with strong momentum and next month we will share our updated strategy, building on all we’ve done to put food back at the heart of Sainsbury’s over the last three years.

“There is a lot to be excited about and we remain absolutely committed to deliver for our customers, colleagues and shareholders.”