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Sainsbury’s has reported higher grocery sales of £7.6bn, up 3.6%, in the first quarter of its financial year, although weaker performances from Argos, clothing and general merchandise weighed on overall retail growth.
For the 16 weeks to 20 June, total retail sales excluding fuel increased 2.7% year on year to £9.15bn, while like-for-like sales rose 2.1%. The group’s grocery sales were supported by continued volume growth and market share gains, while overall Sainsbury’s sales increased 3.1% to £8.04bn.
The group said that strong performances in fresh food, including berries, barbecue products and deli items, alongside initiatives such as Aldi Price Match and Nectar Prices, helped the supermarket outperform the wider grocery market during key seasonal trading periods including Mother’s Day, Eid al Fitr, Easter and the May heatwave.
Online grocery also continued to grow, with sales increasing 12.5% during the quarter, while the retailer reported record customer satisfaction scores for product availability in stores and online order fulfilment. In contrast, Argos sales fell 0.5% to £1.1bn, while clothing and general merchandise sales declined 3.7% to £438m.
General merchandise sales fell 6.3% as the retailer continued reducing selling space in favour of food, while Tu Clothing sales were down 2.1%, outperforming the wider clothing market.
Argos also reported mixed trading during the quarter. Although sales declined slightly, the business recorded volume growth of 2.2%, supported by demand for products including fans during the May heatwave and large-screen televisions ahead of the FIFA World Cup. However, lower average selling prices and continued pricing pressure across the market offset these gains.
Alongside its commercial performance, Sainsbury’s said it continued to invest in healthier food initiatives, introducing new and reformulated products and expanding its Full on Fibre labelling to more than 500 products. During the period, the group installed facial recognition technology in more than 55 stores following a successful trial, with more than 90% of identified offenders not returning. The group plans to roll out the technology to up to 150 further stores before Christmas.
Looking ahead, the group said it remains on track with its Argos transformation programme, which includes expanding its Supplier Direct Fulfilled range, launching a marketplace later this financial year and investing in digital services and AI-led stock forecasting.
Sainsbury’s also maintained its full-year guidance, expecting underlying operating profit of £975m–£1.075bn and retail free cash flow of more than £500m. The retailer said it expects to continue outperforming the grocery market, although it noted that the impact of the conflict in the Middle East on customers and the wider business remains uncertain.
Simon Roberts, chief executive of Sainsbury’s, 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.
"As customers make more considered food choices, we’re going further to make healthy everyday essentials more accessible and affordable, starting with fibre, fruit and veg. From new products and reformulation to clear Full on Fibre labelling on over 500 products, we’re making it easier for families to choose healthier options."
Roberts added: "With the World Cup in full swing and an exciting summer of sport ahead, I want to say a huge thank you to all our Sainsbury’s and Argos colleagues and our farmers and suppliers for showing up so well for our customers every day."
