Friday, November 24, 2017

Sainsbury‘s profits fall 18% but convenience, online and clothing perform well

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Sainsbury’s has recorded a fall in half-year profits amidst a “particularly challenging” market.

Britain‘s third biggest supermarket faces increasing pressure as it battles in the grocery war, where discount chains reign supreme. Big four rivals have been pulling aces from their sleeves too, such as Morrisons‘ move to donate all surplus food to charity. 

The UK company said in a trading update on Wednesday morning that that retail sales, excluding fuel, were down 0.1%. Like-for-like sales fell 1.6%.

While food sales at Sainsbury‘s have declined by almost 1%, the clothing arm of the business performed well with sales up by almost 10% – a result of the retailer‘s dedicated site for its Tu range which was launched in mid-August.

Convenience stores also performed relatively well, enjoying sales growth of almost 11%, while online grocery orders delivered a 7% rise in sales.

“We are making good progress against the strategy we outlined last November,” Sainsbury‘s boss Mike Coupe said bravely. “We are delivering volume and transaction growth as customers value our quality improvements and our clearer, simpler message of lower regular prices.

The grocery retail marketplace remains challenging but Sainsbury‘s is a great business, run by an experienced management team, supported by talented colleagues and strong values. I am confident we are making progress and we are looking forward to a successful Christmas, offering our customers fantastic products and great value.”