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Sainsbury's and Argos report on Q3 trading

Argos and Sainsbury's bags 725 x 500

Sainsbury's has reported on Q3 trading, covering the 15 weeks to 7 January 2017.

A summary of the update follows and the full publication can be found on our Articles page, here.

Overview

Sainsbury’s: Total Retail sales up 0.8 per cent (excl. fuel) and like-for-like Retail sales up 0.1 per cent (excl. fuel), with total volumes up and like-for-like volumes flat

Argos: Total sales up 4.1 per cent and like-for-like sales up 4.0 per cent

Combined Sainsbury’s and Argos like-for-like sales up 1.0 per cent (excl. fuel)

Mike Coupe, Group Chief Executive, said: “Sainsbury’s offered customers greater quality food, choice and value than ever before, across all channels. We had a record Christmas week, with over 30 million customer transactions at Sainsbury’s and over £1 billion of sales across the Group. Thanks to the commitment of all our colleagues, we delivered an excellent shopping experience and helped our customers live well for less over the festive period.

“Our Groceries Online and Convenience channels performed well, achieving over nine and six per cent sales growth respectively and at Argos we saw record levels of online participation. Online sales made up 18 per cent of total Group sales in the quarter.

“Clothing and General Merchandise also had a very strong quarter, with Clothing sales up ten per cent and General Merchandise up three per cent.

“At Argos we delivered strong growth in the quarter, driven by the key Black Friday and Christmas trading periods.

Our Argos digital stores in Sainsbury’s supermarkets are performing well, as awareness of the convenience of shopping at both Sainsbury’s and Argos under one roof grows among our customers.

“The market remains very competitive and the impact of the devaluation of sterling remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”

Strategic and operational highlights

 Sainsbury’s has removed the vast majority of multi-buy promotions and continues to implement its simpler pricing and promotional strategy

 Sainsbury’s achieved like-for-like transaction growth across all channels, total volumes up and like-for-like volumes flat

 Argos delivered strong sales growth in technology categories (wearable tech, mobile phones, computers, TV and audio), toys, sports and gifts

 Argos had a strong online performance over the key Black Friday period, with 65 per cent of sales taken online and a quarter of a million Fast Track deliveries over that weekend. Over the third quarter, online sales grew by 13 per cent, accounting for 57 per cent of Argos sales

 There are now 30 Argos digital stores and three Habitat stores in Sainsbury’s supermarkets and over 200 digital instore collection points where customers can collect their Tu clothing, eBay purchases and DPD parcels

Analyst View

Martin Lane, a representative at www.money.co.uk, said:  

“Sainsbury’s recent acquisition of Argos was clearly a great boost for the grocer. By investing heavily in online the supermarket giant is killing it. They are a brand that clearly recognise consumers needs and understand that digital is where it’s at. 

“Their strategy is one the other supermarkets ought to take note of – although the market will remain intensely competitive for the foreseeable future, they do appear to have a clever strategy to keep the pounds rolling in.”

Source :Sainsbury's
www.j-sainsbury.co.uk

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11 January 2017

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