Sainsbury’s, the renowned UK supermarket chain, had a mixed bag of news to share on Thursday. The company disclosed losses of £173 million for the six months ending on September 19. As a result, Sainsbury’s plans to eliminate approximately 3,500 jobs across the country. Alongside the job cuts, the company also revealed the closure of 420 standalone Argos stores as it incorporates the online catalogue business into its supermarkets.

The impact of the pandemic has been evident in Sainsbury’s clothing sales, which witnessed a decline of 18.3% for the 28-week period ending on September 19. The company attributes this decrease to customers prioritizing essential spending during these challenging times. However, there was a glimmer of hope as clothing sales did show some improvement during the summer months.

Despite the challenges faced by in-store clothing sales, Sainsbury’s core clothing brand, Tu, experienced significant growth in online sales. The company reported “very strong online sales growth” for Tu and observed that the brand is gaining market share in both value and volume. Building on this success, Sainsbury’s plans to expand its clothing and beauty offerings into its ‘Neighbourhood Hub’ convenience stores.

These convenience stores will offer a tailored selection of locally-relevant beauty, clothing, seasonal, and general merchandise. Sainsbury’s aims to open 18 more of these stores within the next three years. This expansion will also entail the addition of 150 Argos units within Sainsbury’s stores and with 150-200 more Argos collection points in supermarkets and convenience stores by March 2024. Sainsbury’s reported robust sales for Argos over the past six months and acquired nearly 2 million new customers.

Additionally, Sainsbury’s has plans to expand its Habitat furnishings and homeware brand within its main stores. The company intends to establish Habitat as its primary home and furniture brand in both Argos and Sainsbury’s outlets. Overall, Sainsbury’s observed positive outcomes in its retail sales. Total retail sales recorded a 7.1% increase (excluding fuel), with like-for-like sales rising by 6.9%. Grocery sales witnessed an 8.2% increase, while general merchandise sales grew by 7.4%. Digital sales experienced substantial growth, amounting to a 117% rise and reaching £5.8 billion, accounting for nearly 40% of total sales. Furthermore, online grocery sales saw a significant jump of 102%.

Despite the challenges posed by the pandemic, Sainsbury’s is finding success in its online offerings and the expansion of its clothing, beauty, and home brands. The integration of Argos into its main stores and the inclusion of collection points aim to provide customers with a seamless shopping experience. Looking ahead, Sainsbury’s remains committed to adapting and innovating in order to meet the ever-changing demands of its customers.

Helpful links:
Sainsbury’s – The Guardian
Sainsbury’s – BBC News