Sainsbury’s suffers 1.1% fall in Q3 like-for-likes

// Sainsbury’s general merchandise and clothing divisions drag overall quarterly results
// Like-for-likes excluding fuel down 1.1%
// Total sales down 0.4%

Sainsbury’s has taken a hit in sales and like-for-likes in its third quarter thanks to a tough trading environment, despite a positive performance in the run-up to Christmas.

For the 15 week period ending January 5, the Big 4 retailer – which also owns Argos and Habitat – reported a 1.1 per cent decrease in overall like-for-likes excluding fuel.

Including fuel, quarterly like-for-likes increased by only 0.3 per cent.

Meanwhile, total sales growth decreased 0.4 per cent during the same quarter.

The drop in like-for-likes and total sales marked the first quarter of decline for Sainsbury’s current financial year.

Sainsbury’s attributed the overall sales drop to its non-food arm, with a 2.3 per cent and 0.3 per cent decline in its general merchandise and clothing divisions respectively.

Chief executive Mike Coupe said the decline was a result of cautious customer spending and reduced promotional activity around Black Friday.

However, Sainsbury’s core grocery sales grew 0.4 per cent, boosted by six per cent and three per cent growth from online and convenience store transactions respectively.

Despite this, the overall sales growth for Sainsbury’s grocery was slower than the two per cent increase recorded in the previous quarter.

“Sainsbury’s stores were well set up to deal with customers doing their big Christmas shops later than usual and Convenience stores hit a new record on Christmas Eve,” Coupe said.

He added: “Grocery sales were solid across the quarter and our price position versus our competitors improved, with our £9 turkey crowns and 30p vegetables proving particularly popular.

“Groceries online continues to perform well and, including Argos, 20 per cent of the group’s sales started online.

“General merchandise sales grew strongly over the key Christmas weeks and outperformed the market over the quarter.

“Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday.

“Clothing performed well, with strong full price sales growth in a tough market.”

Coupe added that consumer outlook continued to be uncertain, but said Sainsbury’s was “well placed” to navigate the challenges plaguing UK retail in order to delivery on its strategy.

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