Sainsbury's fashion ops see good full-price performance but overall sales dip
Christmas wasn’t exactly perfect for UK supermarkets giant Sainsbury’s and its usually buoyant clothing operations didn’t help, with a fall - albeit a very small one - in its sales.
Overall, total retail sales for the company fell 0.4% in the 15 weeks to January 5 (Q3) and like-for-like sales dropped 1.1%. But while grocery edged upwards - being strongest online and in its convenience stores - general merchandise sales dropped as much as 2.3% and clothing sales specifically were down 0.2%.
CEO Mike Coupe admitted that “Christmas came late this year,” and while that wasn’t great news, the company did see some upside from the late burst. Apart from a convenience store surge on Christmas Eve, Argos’s Fast Track speedy delivery option “grew strongly in the quarter” and especially as shoppers took advantage of late delivery opportunities.
In fact, the firm saw Fast Track sales rising 8% in total, underlining the fact that the Argos unit “outperformed” overall. The Argos stores inside Sainsbury's supermarkets also grew like-for-like sales by over 10% in Q3.
Despite the period’s GM sales fall for the full period, Coupe said that the super category’s “sales grew strongly over the key Christmas weeks and outperformed the market over the quarter,” with the reported decline “due to cautious customer spending and our decision to reduce promotional activity across Black Friday.”
And that decision to hold back from markdowns meant that, despite the overall Q3 fashion sales dip, clothing “performed well, with strong full price sales growth in a tough market.”
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