Sainsbury’s has revealed a jump in festive grocery sales as customers traded up to its premium own-brand range but revealed ongoing pressure in its non-food arm and Argos business.
The UK’s second largest supermarket chain behind Tesco posted a 5.1% rise in total grocery sales over the six weeks to January 3, helped by strong demand for its Taste the Difference products.
But Argos sales fell 2.2% in the period and Sainsbury’s non-food and clothing sales were 1% lower.
In its third quarter overall, Sainsbury’s said like-for-like sales excluding fuel lifted 3.4% in the 16 weeks to January 3, which marked a slowdown on the 4.3% notched up in the previous three months.
Despite tougher general merchandise trading, the group said it remained on track with recently upgraded retail earnings guidance of more than £1 billion for the full year.
Chief executive Simon Roberts said the firm had “won grocery market share for the sixth consecutive Christmas” thanks to investment in boosting its offer during a highly competitive festive season.
Mr Roberts said: “When we strengthened our profit guidance in November, we said we planned to invest in the strength of our competitive position through the most important trading period of the year.
“We expected the market to become more competitive with customers spending more carefully and we invested in balanced choices to offer great value for money, outstanding quality and innovation and leading customer service and availability, both in store and online.”
The figures follow Tesco’s festive update on Thursday, which showed a 3.3% rise in like-for-like UK and Ireland sales over the six weeks to January 3, which was lower than forecast.
Shares in Sainsbury’s fell 4% in early trading on Friday as its third quarter growth also came in lower than expected in the market.
Tesco’s chief executive Ken Murphy said on Thursday competition in the market was “intense” and “relentless” over the festive season, with shoppers increasingly seeking out value.
German-owned discounters Aldi and Lidl reported total sales up 3.4% and 10% in the final four weeks leading up to Christmas Day as consumers looked to save money on their festive shop.
But Sainsbury’s said shoppers were also trading-up over Christmas, with sales of its Taste the Difference range jumping 15% in the Christmas quarter.
Fresh food sales also lifted 8% during the quarter.
