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J Sainsbury PLC’s said its grocery sales volume outperformed the market in its financial third quarter, while non-food arm Argos performed ‘exceptionally well’ over Christmas.
‘Sales of technology products were particularly strong, driven by improved availability and promotional activity in the run up to the football World Cup. Household categories performed well as customers bought energy saving items such as air fryers and heated laundry airers and Habitat branded products outperformed in home and furniture,’ Sainsbury’s said.
In the six weeks to January 7, total retail sales, excluding fuel, grew 7.1% year-on-year. They were 9.6% higher on three years earlier. Grocery sales alone also climbed 7.1% annually during the six-week period and were up 15% on pre-virus times. General merchandise sales, which includes Argos, were up 7.4% on a year before, though down 2.2% on three years ago.
In the 16 weeks to January 7, the London-based company’s third-quarter, retail sales rose 5.2% year-on-year and 6.7% on pre-pandemic. Grocery sales were up 5.6% on a year before and 13% on three years before. General merchandise sales were up 4.6% year-on-year, but down 6.9% on pre-pandemic.
‘We delivered the best possible Christmas for customers as millions of households managed their budgets differently, hosting larger gatherings again and treating themselves at home. Customers shopped early, buying Christmas treats and fizz more than once and looked for deals, taking advantage of Black Friday and other seasonal offers. Argos offered great value and quality and, as train and postal strikes disrupted the country, customers appreciated its reliability and convenience,’ Chief Executive Simon Roberts said.
Sainsbury’s now expects underlying pretax profit for the financial year ending in March to be towards the upper end of £630 million to £690 million guidance. This would be down from £730 million a year earlier, however.
‘We additionally expect to generate retail free cashflow of around £600 million, ahead of our previous guidance of at least £500 million,’ Sainsbury’s said. This compares to free cash flow generation of £503 million in financial year 2022.
Sainsbury’s will release its annual results for the year ending March 4 on April 27.
Sainsbury’s shares were 2.3% lower at 240.00 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News reporter
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