UK DIY News

Sainsbury's States Argos 'Outperformed a Weak General Merchandise Market' in Q3

Sainsbury's has published its Third Quarter Trading Statement for the 15 weeks to 5 January 2019.

Total retail sales down (0.4) per cent (excl. fuel) with like-for-like sales down (1.1) per cent (excl. fuel)

Grocery sales grew 0.4 per cent with Groceries Online and Convenience up 6.0 per cent and 3.0 per cent respectively

General Merchandise sales declined by (2.3) per cent and Clothing sales declined by (0.2) per cent

Mike Coupe, Group Chief Executive of J Sainsbury plc, said: "Christmas came late this year and I am pleased with the excellent service and availability that we gave customers across the Group. Sainsbury's stores were well set up to deal with customers doing their big Christmas shops later than usual and Convenience stores hit a new record on Christmas Eve. Argos Fast Track offers customers market-leading delivery and grew strongly in the quarter.

"Sainsbury's is focused on offering distinctive food at great prices. Grocery sales were solid across the quarter and our price position versus our competitors improved, with our £9 turkey crowns and 30p vegetables proving particularly popular. Groceries Online continues to perform well and, including Argos, 20 per cent of the Group's sales started online.

"General Merchandise sales grew strongly over the key Christmas weeks and outperformed the market over the quarter. Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full price sales growth in a tough market.

"Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.

"Thank you to all of our colleagues for working so hard over this key quarter and delivering great service and availability for our customers in stores and online."

Like-for-like sales growth (including Argos in the base)	2017/18				2018/19
	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Like-for-like sales (excl. fuel)	2.3%	0.6%	1.1%	0.9%	0.2%	1.0%	(1.1)%
Like-for-like sales (inc. fuel)	1.6%	0.9%	1.2%	1.8%	2.6%	3.4%	0.3%

Total sales growth (including Argos in base)	2017/18				2018/19
	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Grocery	3.0%	1.4%	2.3%	2.1%	0.5%	2.0%	0.4%
General Merchandise	1.0%	(1.6)%	(1.4)%	(1.2)%	1.7%	1.2%	(2.3)%
Clothing	7.2%	6.3%	1.0%	0.4%	0.8%	(3.4)%	(0.2)%
Total Retail (excl. fuel and excl. impact of sale of Pharmacy)	2.7%	0.9%	1.2%	1.3%	0.8%	1.7%	(0.4)%

General Merchandise and Argos

The General Merchandise market is highly competitive and promotional and sales declined (2.3) per cent; margins remain under pressure

Clothing declined by (0.2) per cent, with strong full price sales growth in a tough market

Argos outperformed a weak general merchandise market in the quarter, with strong sales growth in the key Christmas weeks. Over the quarter, sales were impacted by a combination of cautious customer spending and our decision to reduce promotional activity across Black Friday

Our Fast Track delivery service is increasingly popular, with sales up 8 per cent. Argos customer service scores across all channels showed strong year on year improvement

We opened 23 Argos stores in Sainsbury's supermarkets, bringing the total to 274. Six of the 23 stores replaced an existing Argos store, taking the total number of replacement stores to 99

Argos stores in Sainsbury's supermarkets that have been open for more than one year grew like-for-like sales by over 10 per cent

Source : Insight DIY Team and Sainsbury's

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09 January 2019