Sainsbury’s announces jump in sales as food and drink inflation slows
Inflation eased to 3.9 per cent for the 12 months to November 2023
Sainsbury’s has announced a significant hike in sales over the festive period with shoppers purchasing greater volumes of products as food and drink inflation eased.
However, the supermarket chain also saw a drop in trade for clothing, as well as sales for its Argos business.
Earlier today, Sainsbury’s reported that total retail sales, excluding fuel, rose by 4.9 per cent over the six weeks to January 6.
Over the same period, grocery sales at the country’s second largest supermarket retailer increased by 8.6 per cent.
The supermarket reported record food and drink sales over the festive period
GETTY
In the past year, revenues for supermarkets have been bolstered by higher prices with food manufacturers passing on the cost rises to customers.
However, Sainsbury’s noted today that consumers were purchasing more items during a time of “lower inflation”.
Notably, customers purchased record numbers of mince pies, sparkling wine and pigs in blankets ahead of Christmas.
Thanks to this stronger than expected grocery performance, Sainsbury’s was able to offset a 4.2 per cent decline in Argos sales.
This drop was primarily due to the closure of its Argos Ireland business, as well as six per cent decline in clothing sales.
Total retail sales, excluding fuel, jumped by 6.5 per cent over the 16 weeks to January 6, with grocery sales being 9.3 per cent higher for the full quarter.
Reacting to today’s’ announcement, the supermarket’s chief executive Simon Roberts said: “We enter 2024 with strong momentum and next month we will share our updated strategy, building on all we’ve done to put food back at the heart of Sainsbury’s over the last three years.
“There is a lot to be excited about and we remain absolutely committed to deliver for our customers, colleagues and shareholders.”
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Food and drink inflation has particularly hit Britons over the past year
PARichard Hunter, the head of markets at interactive investor, broke down Sainsbury’s “back to basics” business model helped its grocery sales skyrocket.
He explained: “The availability of discounts came into their own over the festive period, bolstered by seasonal offers which underpinned the sales growth.
“The company estimates, for example, that it grew volumes ahead of the market during the period due to its focus on fresh food, where it outperformed in Meat, Fish, Poultry, Dairy, Fruit and Vegetables.
“It also launched 370 new products over the quarter, including more than 170 Taste the Difference products for Christmas, resulting in some record sales across certain lines.”
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