Sainsbury's reports Christmas sales boost

Sainsbury's, which extended its product range when it bought toys and electricals retailer Argos for 1.1 billion pounds ($1.5 billion) in 2016, indicated that trend would continue this year.

"With a good store mix and offer, Sainsbury's have some resilience in a tough market place and are well placed for the year ahead". In its last financial year, the grocer posted underlying pretax profit of GBP581.0 million. "As a outcome we expect 2017/18 underlying profit to be moderately ahead of published consensus".

Sainsbury's said it now expects to achieve between £80-85mln of EBITDA by March 2018, ahead of its previous guidance of £65mln. Overall, Sainsbury's is on track to save £185m this year, exceeding the three year target of £500m by £40m.

"We are actually over-delivering against the synergies that we promised the markets when we actually acquired the Argos business", Coupe told CNBC. 18 of these stores replaced an existing Argos store. Another 21 expected to open in the final quarter.

The supermarket giant revealed a 1.1 per cent rise in like-for-like sales over the 15 weeks to January 6, helped by booming trading over Christmas week.

Total retail sales were up 1.2 per cent on past year.

Total Grocery sales growth was 2.3%, boosted by the Online (+8.2%) and Convenience (+7.3%) channels.

Mr Coupe also said that the latter two categories grew market share "in a challenging market".

Sainsbury's has reported a 1.1 per cent rise in sales
Sainsbury's has reported a 1.1 per cent rise in sales

The active customer base in Sainsbury's Bank increased by 8.0% year-on-year in the period, with October the company's best ever new sales month for home insurance and November the best ever month for vehicle insurance.

On Tuesday Britain's fourth ranked supermarket chain Morrisons beat Christmas sales growth forecasts while industry data indicated market leader Tesco outperformed its listed rivals during the festive quarter.

On Wednesday discounter Lidl UK said its total sales grew 16 percent in the Christmas period.

The Kantar figures showed United Kingdom consumers had spent GBP1.0 billion more than the previous year, shrugging off economic worries to spend GBP1.05 billion on groceries in the three months to December, spending GBP747.0 million on December 22 alone.

"We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos Fast Track delivery and collection". Online accounted for a fifth of the group's sales during the quarter.

The supermarket's Taste the Difference range performed particularly well, with customers buying more food from the premium range than previous year.

However, the retailer added that sales in its general merchandise division, which includes Argos, fell 1.4 per cent.


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