Sainsbury’s has described its recent trading as “encouraging” despite ongoing uncertainty about how the Middle East conflict will affect its customers. The UK’s second-largest supermarket chain saw stronger growth in its core grocery business, while its general merchandise division, including the Tu clothing brand, and its Argos business both experienced declines.
Sales Performance Overview
Total retail sales, excluding fuel, increased by 2.7% to £9.15 billion in the 16 weeks to June 20, compared with the same period last year. Sales of the Sainsbury’s brand grew by 3.1% to £8.04 billion over the quarter, with grocery sales rising 3.6% year on year. The company attributed this growth to investments in value, such as its Aldi price match and Nectar prices discounts.
Declines in General Merchandise and Clothing
However, grocery growth was partly offset by a 3.7% sales decline in general merchandise and clothing. This included a 2.1% drop in its Tu clothing arm, which faced tough comparisons with a year earlier, and a 6.3% slide in general merchandise sales, which cover homeware, technology, and other items. Argos sales dipped 0.5%, as positive volume growth was “offset by the impact of subdued consumer spending on average selling price,” according to the group.
CEO Comments and Outlook
Chief executive Simon Roberts said: “Customers are looking for value now more than ever. We are consistently delivering outstanding quality at great value, so more people are choosing Sainsbury’s for their big weekly shop. This has driven an encouraging start to the year with continued volume growth and market outperformance.” He also thanked colleagues, farmers, and suppliers for their efforts during the World Cup and the summer of sport.
