Sainsbury’s has reported a £261m loss for the year as it counted the cost of falling fuel sales and COVID-19 measures.

Britain’s second-biggest supermarket chain said grocery sales for the year to 6 March climbed by 7.8% but overall revenues were flat as fewer motorists used their cars during a year of lockdowns.

COVID-19 costs of £485m – covering staff absences as well as measures to make stores safe – plus a one-off restructuring charge took the group into the red for the year.

Chief executive Simon Roberts said: “This year’s financial results have been heavily influenced by the pandemic.

“Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.

“Like our customers, we are all looking forward to things feeling more normal over the coming months and getting excited about a summer of celebration, but we are also cautious about the economic outlook.”

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