Sainsbury’s enjoyed a record Christmas week with over £1bn in sales across the group, with quarterly sales managing to edge up after analysts expected further contraction.
Like-for-like retail sales excluding fuel grew by 0.1 per cent over the third quarter of its trading year, and total retail sales grew by 0.8 per cent before including the impact of the sale of its pharmacy division.
The small rise in like-for-like sales comes after a one per cent decline in the first half of the trading year.
Argos reported like-for-like sales up by 4.0 per cent, and total sales up 4.1 per cent. This meant group like-for-like sales grew by one per cent (excluding fuel).
30m customer transactions took place over the Christmas week, with £1bn of sales.
Shares in the supermarket jumped 4.6 per cent at the open.
Why it's interesting
Supermarkets are one of the bellwethers of the UK economy. Another strong Christmas for a UK store – after rival Morrison’s impressed yesterday – shows little sign of the slowdown many forecasters were expecting after the vote to leave the EU.
However, the one obvious post-Brexit weakness in the economy has been the devalued pound. City A.M. reported yesterday that supplier Premier Foods is set to raise prices, and Sainsbury’s warned of an “uncertain” impact.
Investors will also be heartened by signs the purchase of catalogue retailer Argos seems to be working, with an increase in sales as Sainsbury's moves to further incorporate it into supermarkets.
What Sainsbury’s said
Mike Coupe, group chief executive, said:
Our groceries online and convenience channels performed well, achieving over nine and six per cent sales growth respectively and at Argos we saw record levels of online participation. Online sales made up 18 per cent of total group sales in the quarter.
At Argos we delivered strong growth in the quarter, driven by the key Black Friday and Christmas trading periods. Our Argos digital stores in Sainsbury’s supermarkets are performing well, as awareness of the convenience of shopping at both Sainsbury’s and Argos under one roof grows among our customers.
The market remains very competitive and the impact of the devaluation of sterling remains uncertain.
The supermarket showed little sign of a Christmas slowdown in spending, and managed to raise like-for-like sales after a decline in its first half.