Sainsbury’s has reported that sales (excluding fuel) across the 28 weeks ended 14th September 2024 were up +4.6%, with LFL retail sales (excluding fuel) were up 3.4%, and retail delivered an underlying operating profit of £503m, up +3.7%.
Argos sales, however, were down -5.0%. "Argos sales were below our expectations in the half, particularly in the first quarter and the early weeks of the second quarter, primarily reflecting a slow start to the summer and a reduction in online traffic," states the retailer.
"Profit margins were impacted by lower sales, leading to heavier promotional activity and discounting, particularly in seasonal categories. This was partially offset by operating cost reductions. Sales strengthened during the second quarter and into the early weeks of the third quarter, reflecting strategic actions we have taken to improve customer traffic and volume trends, disciplined clearance activity and better weather against a weaker comparative."
It adds that it is making "strong progress" in repositioning the Habitat brand, with Habitat sales ahead of last year as its "focus on design-led collaborations resonates with customers".
Simon Roberts, chief executive of J Sainsbury, comments: “Our food business is going from strength to strength and we’re making the biggest market share gains in the industry, with continued strong volume growth.
“Our grocery volume growth has delivered strong profit leverage at Sainsbury’s, partially offset by a tough first quarter at Argos. Argos trading has improved through the second quarter and in more recent weeks, so we continue to expect to deliver strong retail underlying operating profit growth and free cash flow generation for the full year.
“With strong momentum and increasing confidence in the strength of our grocery offer, we’re now investing to bring the best of Sainsbury’s to more people in more locations, including the recent acquisition of 11 Homebase and two Co-op stores."
