Sainsbury’s Christmas sales slip as Argos struggles

Supermarket giant Sainsbury’s has posted a 0.7% decline in like-for-like sales for the 15 week period ending 4 January as toy and gaming sales at Argos struggled.

The decrease comes despite grocery sales increasing by 0.4%, with online grocery sales also up 7.3%. Sainsbury’s reported that clothing sales also performed strongly, up 4.4% compared with the previous year, and was attributed to the colder weather and particular popularity in novelty Christmas jumpers.

However this was offset by general merchandise declining 3.9% as toy and gaming markets declined year-on-year. Sainsbury’s boss Mike Coupe told the BBC, that despite Argos experiencing its biggest Black Friday ever, people were buying fewer toys and there was no marquee gaming release to help boost sales.

Sainsbury’s added that it upgraded 127 supermarkets and 93 convenience stores during the quarter and is on track to deliver improvements to 450 supermarkets and 200 convenience stores by mid-March.

Commenting on the results, Coupe said: “We gave our customers a great combination of quality food at good prices this Christmas and we delivered a standout performance operationally.

“We have a real sense of momentum in Sainsbury’s and investment in our stores and improvements to service and availability have led to our highest customer satisfaction scores of the year.

“Our digital investments are also paying off and over 20% of our business was online in the quarter. Groceries Online had record order numbers throughout the Christmas period and customers are increasingly choosing to shop with SmartShop in our supermarkets.”

He added: “Argos had its biggest digital Black Friday to date and record sales through mobile and via Argos Click and Collect 32 million customers shopped with us across Sainsbury’s and Argos in the key Christmas week.

“The colder weather helped to deliver strong clothing sales in the quarter and our Christmas party and gifting ranges were all popular with customers. Argos outperformed the market in consumer electronics, but the toy and gaming markets declined year on year.”

Looking ahead Sainsbury’s said that retail markets remain “highly competitive and promotional” and the consumer outlook continues to be “uncertain”. However. It added it is “well placed” to navigate the external environment and is executing its strategy “well”.

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