Like-for-like sales edge ahead at Sainsbury’s supermarkets as Argos acquisition drives growth

Mike Coupe, chief executive of Sainsbury's.

Mike Coupe, chief executive of Sainsbury's. - Credit: Archant

Sainsbury’s said today that like-for-like sales edged 0.1% higher over the quarter including Christmas, but warned that the market remains “very competitive” and the impact of the pound on prices is “uncertain”.

The UK’s second biggest supermarket chain said it delivered a “good” Christmas performance in the 15 weeks to January 7, while robust Black Friday trading helped its recent acquisition Argos notch up a 4% increase in like-for-like sales.

Mike Coupe, group chief executive, said: “The market remains very competitive and the impact of the devaluation of sterling remains uncertain.

“However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”

The recent performance is well behind that of smaller rival Morrisons, which on Tuesday hailed its best Christmas for seven years after sales surged by 2.9% in the nine weeks to January 1, but still marks Sainsbury’s first quarter of like-for-like growth in a year.

Mr Coupe said the supermarket saw record trading during Christmas week, with more than 30m customer transactions and more than £1bn of sales across the group.

Combined sales across the group, including its supermarkets and Argos stores, were 1% higher, excluding fuel.

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Mr Coupe said the sales growth at Argso and a trading boost seen in combined superstores “reinforced the case” for the acquisition.

Sainsbury’s snapped up Argos owner Home Retail Group last year in a £1.4mn deal. The group said it had shifted 500,000 parcels since September and 55,000 in the Christmas week alone as it increased Argos orders online.

In a further sign of food price rises on the horizon, Sainsbury’s said deflation in its grocery arm eased to 0.5% in its third quarter against 1% the previous three months.

On Tuesday, data from Kantar Worldpanel revealed the first food price inflation in more than two years across the sector over the Christmas quarter and Premier Foods said it was in talks with retailers over “mid-single digit” price rises.