Sainsbury’s: Expected profits up as food shoppers splash Christmas cash but Argos bears brunt of cost of living crisis
Sainsbury’s cashed in on Christmas shopping with retail sales up more than five per cent, as the supermarket giant expects its profit to be at the “upper end” of guidance.
The major retailer now expects to be making close to £700m in pre-tax profit this March, despite the cost of living crisis weighing down consumer demand.
Sainsbury’s reported a near six-per-cent increase in like-for-like sales in the three months to January, with grocery sales being a major driver.
In the third quarter retail sales were up more than five per cent, while grocery increased by 5.6 per cent, which is 12.5 per cent up on pre-pandemic levels.
The supermarket also over the Christmas period specifically, sales and groceries both increased by 7.1 per cent, with profits expected to be at the “upper end of guidance range” between £630m-690m.
Sainsbury’s did however lose progress in year over 3 year growth, with general merchandise and Argos both down significantly.
Looking ahead to the fourth quarter of the year, to March, and the rest of 2023, the supermarket said it had invested in innovation, service and product availability, especially over Christmas.
“We are working together with our suppliers to battle cost inflation and we’re keeping prices low again this year with our biggest value campaign yet in January, price matching Aldi on around 300 of our most popular products.
Simon Roberts, Chief Executive of J Sainsbury
It will also “benefit from finance costs around £15 million” which is lower than expected, and partially offset by “the cost of a significant colleague pay increase ahead of the year end annual pay review.”
Saying it remains “cautious on the consumer backdrop” Sainsbury’s said it now expects “underlying profit before tax for the year to March 2023 to be towards the upper end of the guidance range of £630 million to £690 million.”
With millions of Brits struggling to make ends meet, Simon Roberts, Chief Executive of J Sainsbury, said the supermarket giant is “working together with our suppliers to battle cost inflation and we’re keeping prices low again this year with our biggest value campaign yet in January, price matching Aldi on around 300 of our most popular products.”
“Customers shopped early, buying Christmas treats and fizz more than once and looked for deals, taking advantage of Black Friday and other seasonal offers”, said Simon Roberts, Chief Executive of J Sainsbury.
“Argos offered great value and quality and, as train and postal strikes disrupted the country, customers appreciated its reliability and convenience.”
He added that Sainsbury’s has “prioritised keeping our prices low and giving our customers great value at Christmas” amid the cost of living crisis, saying that a traditional Christmas meal could have been bought “at under £4 per head.”
“Sales were also boosted by the World Cup as people celebrated more at home”.
“We understand money will be exceptionally tight this year particularly as many people wait for Christmas bills to land.
“We are working together with our suppliers to battle cost inflation and we’re keeping prices low again this year with our biggest value campaign yet in January, price matching Aldi on around 300 of our most popular products.