// Sainsbury’s raises its full year profit guidance after delivering strong Christmas results
// Total retail sales fell 2.9% against 2020’s bumper Christmas, however sales rose 2.4% on a two-year basis
Sainsbury’s has raised its annual profit expectations and grew market share, despite a fall in sales during its core Christmas trading period.
Group sales, which also include Argos and Habitat, fell 2.9% year-on-year in the six weeks to January 8, however grocery sales edged 0.1%.
The grocer was up against tough comparatives after a bumper Christmas in 2020. Total sales rose 2.4% against pre-pandemic with grocery sales up 6.8% against Christmas 2019/20.
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Online grocery sales fell 15% year-on-year as shoppers returned to store. The group, which includes Argos, said it now expected to report underlying profit before tax of at least £720 million for its financial year to March 2022.
Despite the strong performance, Argos sales were more than 9% down in the company’s wider third quarter compared to the same period last year and the supermarket chain’s general merchandise performance was 20% lower. Sainsbury’s boss Simon Roberts said the business was hit by product shortages on key lines of consumer electronics, toys and televisions caused by supply chain issues across retail.
Sainsbury’s said of the revision: “Our expectations for full year profits are ahead of previous guidance, with investment in the customer proposition and higher operating cost inflation offset by structural cost savings and stronger than expected grocery volumes, driven in part by increased in-home grocery consumption.”
Chief executive Simon Roberts said: “I am really pleased with how we delivered for customers this Christmas. More people ate at home and our significant investment in value, innovation and service led to market share growth.”
The company added that full price clothing sales were up 38% versus two years ago thanks to reduced markdowns and promotions.
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