Sainsbury’s raises profit forecast after enjoying record Christmas

Overall, grocery sales grew 2.3 per cent, while online grocery sales surged 8.2 per cent and convenience sales posted a 7.3 per cent gain

The supermarket chain’s premium ‘Taste the Difference’ range was a hit as customers apparently treated themselves amid a squeeze on incomes

Sainsbury’s has reported its best Christmas trading performance ever, driven by a surge in online sales and a strong performance across its Argos business, triggering the retailer to upgrade its profit forecast for the full financial year.

The supermarket giant on Wednesday said that, excluding fuel, total sales in the 15 weeks to 6 January had risen by 1.2 per cent compared to the equivalent period in the previous year. Like-for-like sales – a measure which compares the performance across exactly the same stores – increased by 1.1 per cent, also stripping out fuel.

“We’re pleased with our performance across the group this quarter. 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,” said chief executive Mike Coupe.

He said that online sales had accounted for 20 per cent of all sales during the quarter. Friday 22 December was the retailer’s busiest day for sales and on that day Sainsbury’s delivered an online grocery order to a customer every second.

Mr Coupe said that customers bought more of the supermarket’s higher-end “Taste the Difference” range this Christmas period than last, seemingly treating themselves despite generally feeling the squeeze of higher inflation.

Overall, grocery sales grew 2.3 per cent, while online grocery sales surged 8.2 per cent and convenience sales posted a 7.3 per cent gain.

As a result of the robust performance over the festive period, Sainsbury’s said that it now anticipates underlying profit for the full financial year to be “moderately ahead of published consensus”, which is £559m.

Sainsbury’s said that it had launched 185 new food lines for Christmas, had offered key Christmas vegetable lines for 25p and had some of the lowest turkey prices in the market.

Argos, which Sainsbury’s agreed to buy in 2016, saw record sales over the Black Friday period. During the quarter to 6 January, Argos Fast Track collection grew by 39 per cent and delivery by 25 per cent.

Sainsbury’s also said that it opened 52 Argos stores in Sainsbury’s supermarkets during the period, bringing the total to 164.

Sainsbury’s now has a 16.2 per cent share of the overall UK grocery market, according to analytics firm Kantar Worldpanel, behind Tesco but ahead of Asda and Morrisons.