Published: Fri, July 07, 2017
Medical | By Garry George

Sainsbury's sales boosted by warm weather

Sainsbury's sales boosted by warm weather

"No longer leaning precariously on the Argos crutch, the Sainsbury's core business is back on its feet and growing food sales at a healthy clip".

As one of the Big Four (alongside Tesco, Morrisons and Asda), supermarket chain Sainsbury's performance is always an indication of how the very competitive British market is holding up, considering the barrage coming from discounters Aldi and Lidl.

Sainsbury's chief executive Mike Coupe said: "We have seen strong food sales where we have invested in product innovation, such as our new summer eating ranges".

"We have delivered a strong performance, driven by our differentiated strategy, offering customers quality, value and choice across food, general merchandise, clothing and financial services", he said.

Sainsbury's latest sales figures mark an acceleration from the previous quarter when sales grew by just 0.3%.

This was the first quarter following the Home Retail purchase for which the group did not issue separate like-for-like sales data for Sainsbury's and Argos.

But Laith Khalaf, senior analyst at Hargreaves Lansdown, said despite the strong results, the bigger picture remained challenging for the United Kingdom supermarkets as weaker sterling is pushing up food prices and the trading environment remains as competitive as ever.

He noted that prices of staples, such as broccoli, milk, apples, chicken breasts and eggs were cheaper than they were three years ago.

Sainsbury's said total grocery sales rose 3 percent, while transactions at the supermarket were up 1.9 percent.

General merchandise sales were dented by the closure of Argos and Habitat concessions in Homebase stores, but rose 1%.

The group said online grocery sales increased 8 percent, while sales at convenience stores were up 10 percent. Such an outcome would represent a fourth straight year of profit decline.

The update comes amid reports that the United Kingdom grocer is eyeing a takeover of convenience store chain Nisa.

Coupe, however, wouldn't be drawn on possible deals. "We talk to lots of people", he said. "Most of these conversations come to nothing", the Sainsbury's boss told reporters.

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