Website crash costs Sainsbury's £700,000 a day

Sainsbury's website glitch is costing the retailer an estimated £700,000 a day in lost business.

Sainsbury's website glitch is costing the retailer an estimated £700,000 a day in lost business.

The website has now been down almost two full days, at a cost of £1.5m, according to calculations by Computer Weekly.

The glitch is believed to have stopped between 16,000 and 20,000 Sainsbury's customers from shopping online so far.

A spokeswoman told Computer Weekly she expected an update soon on progress in fixing the problem.

She denied that the site had been hacked, saying the problem was an "internal" one. She said, "We are not going into detail on whether the system is with the hosting systems or our own systems other than to say it is an internal technical error. Nor are we going into any detail on the nature of the glitch other than to say it was an issue with processing the order."

Sainsbury's chief executive Justin King said this week the retailer served 18 million customers a week. This means its online customers are just 0.5% of its total, but online sales volume is growing at more than 40% a year, King said.

The spokesman said Sainsbury's would not have to adjust its financial accounts or stock records as a result of the glitch. This was because online sales are such a small part of the overall business.

TNS, a market research firm, said online now accounts for 3.4% of British grocery shopping by spend. Over the past year, 26% of households purchased groceries online.

How we worked it out

Sainsbury's says some 90,000 shoppers use its online store every week. Of these, 8,000 to 10,000 a day do their shopping mid-week.

Fraser McKevitt, an analytical consultant with market research firm TNS, says the average value of UK online grocery shoppers' baskets for the past 12 weeks was £71.12. The average instore basket size for the top four grocers was £23.

So, multiplying online shopping baskets by value brings us neatly to between £569,000 and £710,000 a day in lost sales for every day the website is down, and to £6.4m if the site is down for a week.

Sainsbury's has also promised customers affected by the stoppage £10 each in online vouchers to compensate for the inconvenience. This adds about £100,000 to its bill. The calculation does not include the cost of fixing the glitch.

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