Jul 1, 2020
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Sainsbury's fashion sales fall in lockdown but recovery has started

Jul 1, 2020

Fashion sales seem to be recovering at Sainsbury's, the supermarkets giant that's also a major clothing retailer, it said in a Q1 trading update on Wednesday.

Tu Clothing

The company said that in the 16 weeks up to June 27, its clothing sales declined 26.7%, which is a disappointment after clothing sales had risen in both of the previous two quarters. But they saw “encouraging signs of recovery during the latter half of the quarter, helped by Tu Online sales growth of 87% and successful clearance activity”. It means its stock position is “better than anticipated”.

It added that categories such as loungewear, exercise wear, nightwear and kidswear all performed well during the quarter.

Sainsbury's has benefited from having remained open throughout the lockdown so shoppers were still able to buy fashion items, even though the quarter’s decline suggests that clothing wasn't high on consumer priority lists.

As for its General Merchandise, which is hugely important to the company both because of the GM it sells in its supermarkets and because of its ownership of Argos, sales here rose 7.2% in total.

GM sales in Sainsbury's stores declined, but “the trend improved through the quarter, reflecting strong seasonal demand and some normalisation of customer behaviour in stores”.

Argos was affected as all 573 of its standalone stores in the UK and Republic of Ireland were forced to close on March 24. But home delivery sales grew by 78% during the quarter and click & collect sales from Sainsbury's supermarkets for the Argos operation grew by 53%. This meant Argos sales overall rose by a healthy 10.7%.

Customers were able to collect orders in 307 Argos stores within Sainsbury's, made up of 173 collection points in the supermarkets and 186 collection points in Sainsbury's Local stores.

The group’s total retail sales excluding fuel rose 8.5%, and like-for-like sales were up 8.2%. But that's unlikely to translate into higher profits as costs from the coronavirus crisis are expected to have impacted profit by more than £500 million, although the sales rises will have balanced out that figure.

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