Clothing sales dip at Sainsbury's but general message is positive
UK supermarkets giant J Sainsbury has reported group sales up 3.5% to £16.884bn in the 28 week to September 22 and said that underlying profit growth of £51 million “was driven by Argos synergies, delivered ahead of schedule.”
It also said that general merchandise sales benefited from the hot summer, beating grocery’s 1.2% growth with a 1.5% sales rise.
But it wasn’t all good news as there was continued pressure on general merchandise margins and clothing sales declined 1% due to changes in promotional phasing.
That’s bad news after the company has reported a string of clothing sales increases over recent periods, its Tu Clothing offer being one of the bright spots in its regular trading updates.
The company said that its “promotions are now more closely aligned with key seasonal events, offering customers great value when they want it most,” although given that this resulted in a 1% sales fall for fashion, that strategy might need to be tweaked! Or perhaps the sales fall was just a one-off. We won’t know until its next set of results. Anyway, at least online sales grew 52% following the launch of Tu at Argos.
The company also launched Tu Petite online and it will be available in stores in the coming months. It has other initiatives lined up too, such as its recently-announced a link-up with Oasis. This strategy of joining “carefully-selected concession partners [that] offer customers convenience and choice across a range of products and services” has also seen 18 branches of Specsavers opening in its stores and it plans to double this number by the end of the financial year. It also has three branches of Clarks footwear.
And it has "laid the foundations for a major makeover of our beauty offer by launching a spacious, department store-style beauty section in 10 of our supermarkets, enabling our customers to buy market-leading and exclusive brands conveniently under one roof."
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