Argos props up Sainsbury’s struggling sales

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Sainsbury’s decision to acquire Argos and Habitat last year has paid off, as the company recorded a combined like-for-like retail sales rise of three per cent in its fourth quarter.

The company’s overall sales growth was propped up by a 4.3 per cent increase in like-for-like sales at Argos alone, a slight acceleration from growth of 4.0 per cent in the previous quarter.

Sainsbury’s Tu clothing brand also performed ahead of the market, with sales up five per cent.

However, in isolation like-for-like sales excluding fuel at Sainsbury’s core supermarket business edged down by 0.5 per cent in the nine week period to March 11.

In addition, for the full year the grocer’s total sales growth excluding fuel was down 0.4 per cent, and on a like-for-like basis it was down 0.6 per cent.


READ MORE: Grocery vs Fashion: Why is fashion being left in grocery’s dust?


Despite this, Sainsbury’s online grocery delivery business experienced seven per cent growth, with orders up eight per cent.

Sainsbury’s, along with other Big 4 supermarket rivals Tesco, Morrisons and Asda, have been engaged in a price war as they lose market share to discounters Aldi and Lidl.

The fall in the value of the sterling since the Brexit vote last June has added further pressure, especially when it comes to import costs.

Despite the challenges in the company’s grocery core business, Sainsbury’s chief executive Mike Coupe said they were “pleased with this performance” and were “making good progress against our key priorities”.

“The market remains very competitive and the impact of cost-price pressures remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy,” Coupe added.

Sainsbury’s acquired Home Retail Group, which owns Argos and Habitat, last September in a £1.4 billion deal.

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