Sainsbury's Q2: improving momentum in grocery sales

Date : 25 September 2019

Sainsbury's has reported improved trading for Q2 with total sales up +0.1% in the 12 week to September 21st, excluding fuel, lifted by improved momentum in grocery sales.

Most resilient retailer of the Big Four

LFL sales in the period were -0.2%. This is compared to -1.6% in Q1 and +1% in Q2 18/19. Performance was mixed amongst different categories with total grocery sales at +0.6%, clothing +3.3% and general merchandise at -2%. Commenting on the results CEO Mike Coupe said "Sales momentum was stronger in all areas and we further improved our performance relative to competitors, particularly in grocery."

In the latest Kantar read of the GB grocery market. Sainsbury's was the most resilient of the Big Four, seeing its best performance since October 2018, with sales in the 12 weeks to September 8th alsmost flat at -0.1%. This was also preceded by a more robust performance in the previous period. The summer was a challenging period for all retailers due to the strong sales of 2018, which benefited from the hot summer and events such as the World Cup and royal wedding.

Sales dip at Argos but clothing sales up

On the Argos business Mike Coupe commented; "Argos continued to grow market share in key categories, but sales were reduced by promotional activity and the timing of new product releases in gaming and toys." Clothing sales were boosted by clearance activity while financial services sales were in line with expectations.

Full year profit outlook unchanged despite tough H1

Sainsbury's now expects underlying H1 profit before tax to be £50m less expected due to the combined impacts of the phasing of cost savings, unseasonal weather against a tough comparative and higher marketing costs. However it expects to make up the lost ground in H2 when it benefits from the annualisation of last years pay award for colleagues and a normalisation of marketing costs and weather comparatives.

 

Sainsbury's has also announced six new priorities to frame strategy - click here for full details

Sainsbury's will release interim results on Thursday 7th November.

IGD Live 2019

6-7 November, London

IGD Live brings together the best speakers and insight from across the consumer goods industry. Experts in category management, digital commerce, convenience retailing, wholesaling and food-to-go will combine in one location for one major, tailorable experience. Sainsbury's Food Commercial Director Paul Mills-Hicks will also be speaking.

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