Sainsbury’s boosted by Argos and online over Christmas

Although it beat industry forecasts, Sainsbury’s Christmas sales were flat as the group relied on Argos and its online expertise to provide some festive cheer.

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Sainsbury’s saw like-for-like sales edge up 0.1% for the 15 weeks to 7 January as its Argos business provided the lion’s share of Christmas cheer.

Although Sainsbury’s sales are a far cry from the 2.9% rise reported by Morrisons yesterday (11 January), they are ahead of  industry forecasts with analysts expecting Sainsbury’s to report a fall of up to 0.8%.

READ MORE: Sainsbury’s gives the gift of time in Christmas campaign

Speaking on a press call, CEO Mike Coupe said the standout performer over Christmas was clothing, with sales up 10%. And, perhaps unsurprisingly given how shoppers typically trade up over the period, its premium Taste the Different party food range saw sales rise 50%.

Despite concerns over Brexit impacting Brits’ Christmas spend, Coupe said: “Our customers were feeling quite chipper over Christmas. It’s a credible performance in a challenging market.”

Coupe said Sainsbury’s had a record Christmas week with more than 30 million customer transactions, while the 15-week period represented the first time it surpassed £1 billion in quarterly sales across the business. This was largely due to Argos, which saw a 4% rise in like-for-like sales over the festive period, well ahead of forecasts of a 1.6% increase.

Argos saw “record levels of online participation” with 65% of its sales taken online over Christmas and a 13% rise in online sales. Its festive yeti ad, which focused on fast deliveries, also appears to have bared fruit, with a quarter of a million Fast Track deliveries registered over the Black Friday weekend.

For Sainsbury’s specifically, total sales for online were up 9%, with online sales representing 18% of the supermarket and Argos’s combined total sales.

“Christmas came late. The group took a record £1bn worth of sales in the final week leading up to it,” said Coupe. “But 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.”

Industry figures from Kantar Worldpanel suggest price rises are returning to stores as inflation puts an end to a sustained period of deflation. And Coupe warned of an uncertain future.

“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,” he concluded.

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