Sainsbury’s has seen sales fall over Christmas after general merchandise trading was hit by consumer caution.
Like-for-like retail sales, which exclude sales from new stores, fell by 1.1% across the Christmas period. General merchandise sales, including at Sainsbury’s-owned Argos, fell by 2.3% and overall clothing sales by 0.2%.
Chief executive Mike Coupe said: “Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. 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.”
However, the supermarket giant said in the 15 weeks to 9th January, grocery sales grew by 0.4%, with groceries online and in convenience stores up by 6% and 3%.
The third-quarter retail sales figure was worse than analysts had expected, having predicted a 0.2% decline. Retail analyst Teresa Wickham told BBC Radio 4’s Today programme: “It is a mixed bag. Christmas has clearly been difficult for them.”
She said Sainsbury’s had had to make difficult decisions about how far it should go down the promotional route in order to compete with Aldi and Lidl. But she added that the UK’s second-largest grocery chain had a “very valuable property in Argos”, despite the fall in merchandise sales.
Sainsbury’s plans to merge with rival Asda, with the Competition Market Authority’s verdict on the plan expected to be published in February.