Sainsbury’s posts strong first quarter sales growth
Sainsbury’s increased its total retail sales excluding fuel by 8.5% in its first quarter after trading was boosted by strong online sales due to the Covid-19 pandemic.
In the 16 weeks to 27 June, the retailer’s like-for-like sales rose by 8.2% as grocery sales climbed by 10.5%.
Meanwhile, general merchandise sales rose by 7.2% after sales at Argos in the category climbed by 10.7%
However, clothing sales fell in the period, dropping by 26.7%, and general merchandise sales in Sainsbury’s stores declined by 9.3%.
Simon Roberts, Sainsbury’s chief executive, said: “Our business has changed fundamentally from four months ago. We have more than doubled our weekly sales of online groceries in recent weeks, SmartShop now accounts for more than half of sales in some supermarkets and Argos sales were strong while operating as an online-only business for almost twelve weeks. Warm weather boosted food sales and sales in seasonal categories in Argos, but sales of clothing and fuel and trading in city centre Convenience stores were all significantly down year on year as a result of lockdown.
“We have worked really hard to listen and to respond to customers throughout the crisis. We have lowered prices on many key products as we continue to focus on lower regular prices. Our price position versus our competitors has improved in the quarter, Sainsbury’s key customer feedback scores are at record levels and we have gained market share.”
Looking ahead, Sainsbury’s said its operating costs remain high due to costs relating to keeping customers and staff safe during the pandemic, significantly higher online participation, including prioritisation of elderly, disabled and vulnerable customers, and weak sales of fuel, clothing and general merchandise within Sainsbury’s stores.
Roberts added: “The coming weeks and months will continue to be challenging for our customers and our colleagues and we do not expect the current strong sales growth to continue. A number of the decisions we have made have materially increased costs but meant that we have done the right thing for our customers and set us up well for the future.”
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