Sainsbury’s announces store closure programme
Sainsbury’s saw its second quarter like-for like sales edge down 0.2% as it unveiled plans to close some of its supermarkets, convenience stores and Argos shops.
In the 12 weeks to 21 September, total retail sales rose by 0.1% while total grocery sales edged up 0.6%. General merchandise sales declined by 2% on a total basis despite a 3.3% increase in total clothing sales.
Mike Coupe, chief executive of Sainsbury’s, said: “Sales momentum was stronger in all areas and we further improved our performance relative to our competitors, particularly in grocery. We have focused on reducing prices on everyday food and grocery products and expanding our range of value brands, which have been very popular with customers. At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability.”
The company said sales at its Argos chain were impacted by reduced promotional activity and the timing of new product releases in the gaming and toys category.
Meanwhile, clothing sales benefited from a range of clearance activity and strong online growth.
Sainsbury’s said it remains on track to deliver full year underlying profit before tax in line with expectations. However, it expects first half underlying pre-tax profit to reduce by around £50 million year-on-year due to the combined impacts of the phasing of cost savings, unseasonal weather and an increase in marketing costs.
The company has also revealed that it is planning to close around 10 to 15 supermarkets, 30 to 40 convenience stores and 60 to 70 Argos shops. As part of a store estate review, Sainsbury’s will also open around 10 new supermarkets, 110 convenience stores and 80 Argos outlets in Sainsbury’s stores.
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