Sainsbury’s suffers a seasonal hangover
Sainsbury’s has warned of an “uncertain” consumer outlook as it announced a fall in festive sales, saying Christmas came late as shoppers held off until the last minute.
The supermarket giant, which is planning to merge with Asda in a £12bn deal, said like-for-like retail sales fell 1.1 per cent in the 15 weeks to January 5.
Sainsbury’s said its belief that the competition regulator would clear its merger with Asda has not diminished since the deal was announced in April.
inset, Chief executive Mike Coupe, said: “It (confidence) remains exactly the same.
“We remain confident in the case we are making to the CMA (Competition and Markets Authority).
“In that respect nothing has changed.”
Sainsbury’s blamed “cautious” consumer spending for falling sales over its festive quarter as its Argos business also suffered after cutting back on heavy discounts.
Mr Coupe said shoppers traded down amid a general pull-back in spending as Brexit uncertainty weighs.
While grocery sales rose 0.4 per cent over the quarter, Sainsbury’s said this was offset by a 2.3 per cent fall in general merchandise and a 0.2 per cent decline in clothing.
It said general merchandise sales, including its Argos business, grew “strongly” over the key Christmas weeks, but this was not enough to boost the overall performance. Mr Coupe said: “Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday.”
He added that consumers have become “extremely cautious about what they spend their money on”, down-trading on their groceries and splashing out less on toys and electricals over Christmas.