Sainsbury’s, a major UK supermarket and owner of the popular clothing brand Tu, has released its trading statement for the 16-week period ending in June. Despite facing sales declines in certain areas, the company’s business is progressing as expected.

Clothing sales were down 26% in the first five weeks of the period, but the decline reduced to 2% in the last 11 weeks. However, when compared to pre-pandemic levels, clothing sales have actually increased by 3.9%. This growth can be attributed to the strong performance of women’s dresses, holidaywear, and swimwear, which have all benefited from increased travel.

On the other hand, Sainsbury’s Argos unit experienced a 19% decline in sales in the first five weeks and a 7% decline in the last 11 weeks. Sainsbury’s own general merchandise sales also saw a significant decrease of 30% in the first five weeks, which improved to a 5% fall in the latest 11 weeks. However, general merchandise sales at both Argos and Sainsbury’s are lower than they were three years ago.

It’s worth noting that the comparison period at the start of the 16-week period was challenging due to the UK’s lockdown restrictions. While many stores were closed, supermarkets like Sainsbury’s were allowed to remain open, resulting in artificially boosted sales of clothing and general merchandise. Even after the easing of lockdowns, consumers preferred to avoid non-essential physical shops, but Sainsbury’s superstores benefited from increased grocery sales, potentially supporting non-food sales.

Overall, Sainsbury’s reported a 2.5% increase in total Q1 sales compared to last year and an 8.9% increase compared to three years ago. CEO Simon Roberts emphasized the strong connection between the company and its customers, noting that they still turn to Sainsbury’s for special occasions. He highlighted the company’s ability to outperform the market during significant events such as the Jubilee.

In other news, Kevin O’Byrne, Sainsbury’s CFO for the past six years, has announced his intention to retire at the end of the financial year in March 2023. Bláthnaid Bergin, currently the Commercial and Retail Finance Director, will assume the CFO role next year. O’Byrne has been credited with playing a crucial role in implementing the company’s strategy and improving free cash flow generation, while Bergin has demonstrated strong financial leadership during her time at Sainsbury’s.

Overall, Sainsbury’s trading update reflects the challenges and successes in the retail industry. Despite sales declines in certain areas, the company remains confident in its ability to connect with customers and deliver strong performance, especially during special occasions. As it prepares for a transition in leadership with O’Byrne’s retirement, Sainsbury’s aims to maintain its strategic focus and financial strength to continue meeting customer needs.

For more information, please visit:
Sainsbury’s Official Website
Retail Gazette