UK retailer Sainsbury’s has posted a 2.3% increase in like-for-like sales (excluding fuel) in the first quarter of its financial year, according to results published this week (4 July).
The retailer saw grocery sales up 3.0% and transaction growth of 1.9%, saying that it “outperformed the market” in both general merchandise (+1.0%) and clothing (+7.2%).
Overall, retail sales were up 2.7% (excluding fuel) for the period.
Strong Performance
“We have delivered a strong performance, driven by our differentiated strategy, offering customers quality, value and choice across food, general merchandise, clothing and financial services,” said Sainsbury’s chief executive, Mike Coupe.
“We have seen strong food sales where we have invested in product innovation, such as our new summer-eating ranges. Our produce category, where we know quality matters most to customers, performed particularly well, outperforming the market, with volume growth of over 1%.”
Online Growth
Online sales rose by 8% in the period, driven by increased online traffic at Sainsbury’s Argos business. Argos’s Fast Track delivery service was up 36%, while collection was up 64%, driven by the recent spell of hot weather, Sainsbury’s said.
The group’s convenience arm saw sales go up by 10%.
“The market is competitive, and we continue to manage cost-price pressures closely,” Coupe added. “Our strategy is delivering, and we are well placed to navigate the external environment.”
Analyst Comment
Commenting, Barclays European Food Retail Equity Research said, “Sainsbury states it is on track to achieve £145 million of cost savings this year and states it remains confident [of] delivery [of] £160 million of EBITDA synergies from the Argos transaction.
“The overall sales figure appears moderately better than expected, despite slightly weak recent market-share data. This, combined with apparent resilience at Argos, should be taken positively, in our opinion.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
