Sainsbury’s profits fall 9pc

SAINSBURY’S is banking on a bumper Christmas after posting a fall in half-year profit.

The retailer is hoping Lego and Star Wars-themed toys, and a special snow-globe Christmas sandwich, will pay off after reporting slowing sales.

The grocer has been hit by rising inflation and higher wages – as well as the inclusion of the seasonally loss-making Argos, which it acquired last year.

Same- store sales increased 1.6pc in the half-year, but slowed in the second quarter with a 0.6pc rise, down from 2.3pc in the previous three months. Profits dropped 9pc to £251m for the six months to September 23 – against £277m a year earlier.

Chief executive Mike Coupe said the outcome partly reflected a programme to close around 100 Argos concessions in Homebase DIY stores and a ‘fairly soggy summer’. He said: ‘If you look at the more recent market data, we are at least holding our own, if not performing better than the overall market.’

Sales across Sainsbury’s local stores increased 8.2pc while online sales were up 7.2pc. Clothing rose 6.8pc. Sainsbury’s said it would have 165 Argos stores in supermarkets by Christmas, having incorporated 112 stores in its branches so far.

Coupe defended the decision to purchase Argos, saying it would largely reap the benefits in the coming months.

Sainsbury’s also thinks its £3.50 sandwich, made with turkey, bacon, brussel sprout slaw, pork stuffing, mayonnaise and a cranberry and port sauce, and packaged in a plastic container shaped like a snow globe, will be a best seller.