Sainsbury’s Christmas sales fall despite grocery uplift

The grocer reported a 0.4% decline in total retail sales excluding fuel in the 15 weeks to January 5, exacerbated by a 1.1% decline in like-for-like sales.

Grocery sales rose 0.4% during the period, spurred by a 6% and 3% increase in its online grocery and convenience sales respectively.

These increases were offset, however, by a 2.3% decline in Sainsbury’s general merchandise sales and a 0.2% dip in clothing sales, which the retailer attributed to decreased Black Friday promotional activity.

The grocer’s meat-free Free From category posted a 14% boost in sales during the period and now contributes over £100m to the retailer’s annual sales.

Although Argos sales were impacted by reduced Black Friday promotions, Sainbury’s said its sales during the quarter overall “outperformed a weak general merchandise market” due to “strong sales growth in the key Christmas weeks”.

Argos’ Fast Track delivery service recorded an 8% uplift in sales during the period, while the retailer’s shop-in-shops in Sainsbury’s outlets, which have been open for over a year, posted a 10% rise in like-for-like sales during the period.

A further 23 Argos stores were opened in Sainsbury’s supermarkets in the quarter, bringing the total to 274.

Chief executive Mike Coupe said: ”Christmas came late this year and I am pleased with the excellent service and availability that we gave customers across the group. Sainsbury’s stores were well set up to deal with customers doing their big Christmas shops later than usual and convenience stores hit a new record on Christmas Eve.

“Argos Fast Track offers customers market-leading delivery and grew strongly in the quarter.

“General merchandise sales grew strongly over the key Christmas weeks and outperformed the market over the quarter. Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full-price sales growth in a tough market.

“Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”