Sainsbury's festive sales slip as demand for toys and games falls
The supermarket posted its fifth quarter in a row of falling sales amid what it called a "highly competitive" market,
Thursday 9 January 2020 09:39, UK
Sainsbury's has reported a fall in sales over the Christmas quarter as lower demand for toys and games offset the popularity of festive party food and a sell-out range of novelty jumpers.
The supermarket group, which also includes retailer Argos, said like-for-like sales for the 15 weeks to 4 January were down 0.7% on the same period last year.
Its Christmas trading update comes a day after industry data showed customers tightening their belts over the festive period, with supermarket sales growing at the slowest pace since 2015 in retail's so-called "golden quarter".
Sainsbury's third-quarter sales figure was its fifth decline in a row and worse than the 0.2% downturn seen in the second quarter.
The company said: "Retail markets remain highly competitive and promotional and the consumer outlook continues to be uncertain."
Sainsbury's said that total grocery sales for the period rose 0.4%, helped by £9 turkey crowns and Christmas party food as well as greater demand for its premium "taste the difference" products.
Reflecting the tough competition in the sector, it also said it was cutting the price on popular products during January including apples, mangoes and avocados.
There was a mixed picture for its non-food offerings over the festive period.
Argos had its biggest Black Friday to date but over the whole quarter general merchandise sales were down by 3.9%.
However Sainsbury's clothing sales grew by 4.4%, with womenswear including novelty Christmas jumpers proving particularly popular.
Chief executive Mike Coupe said: "The colder weather helped to deliver strong clothing sales in the quarter and our Christmas party and gifting ranges were all popular with customers.
"Argos outperformed the market in consumer electronics, but the toy and gaming markets declined year on year."
Mr Coupe's strategy has been under the spotlight after its planned merger with Argos was blocked by competition regulators.
Sainsbury's, like its "big four" supermarket rivals Tesco, Asda and Morrisons, has been continuing to lose ground to discount rivals Aldi and Lidl.
But delivering the Christmas update, Mr Coupe insisted there was a "real sense of momentum" about the business with investment in stores and improvements to service and availability.