Sainsbury’s sales growth has slowed despite a boost in grocery trading from the Euro’s as the supermarket giant took a hit from Argos sales due to poor weather from their seasonal ranges.
In the 16 weeks to 22 June Sainsbury’s reported a 3% rise in underlying like-for-like sales, but this excluded the closure of Argos in Ireland and fuel.
Chief executive Simon Roberts said that there is “everything to play for” with a turnaround for Argos and merchandise trading.
Roberts said, “With a better summer and hopefully some interest rate cuts to come, it will give consumers some confidence.”
He said that the general election will provide households with more certainty, “Depending on the result, lots of people are looking for certainty and clarity on what’s going to happen next.”
He added that the group is “pleased with our market-beating grocery performance.
“We’ve been winning from competitors every month for 15 months, as more and more people are choosing Sainsbury’s for their big weekly shop.”
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said, “As inflation cools, the weather worsens and tough comparisons crop up on the course, eking out the amount of growth seen last year was always a difficult ask.
“But there is a lingering Sainsbury’s specific issue in its ownership of Argos.
“Electronics aren’t faring well in this economic climate, as people prioritise the essentials.
“General merchandise is the most cyclical area of the supermarket economy to be in, so being overweight in this arena really slows you down when times get tough.”
