Sainsbury’s has recorded its strongest growth since last summer after its Argos chain recorded a big step up in sales as shoppers sought out paddling pools and fans during recent hot weather.
The retail group said Argos, its catalogue shop, was able to achieve growth of 4.4% in the three months to 21 June, up from 1.9% in the previous quarter. Comparable group sales, excluding fuel, rose 4.7% on a year earlier.
The group’s total sales rose 4.9%, helped by the strong trading at Argos and a rise in clothing sales as shoppers snapped up shorts and swimsuits, as well as healthy demand for its premium food ranges. That excludes fuel, where sales fell partly because of price decreases.
The retailer said it had achieved the strong sales despite a “subdued, highly competitive and deflationary general merchandise market” as it booked rapid growth in online sales and via its app. Sales in stores declined, partly because of further closures as many Argos sites move from high streets into Sainsbury’s supermarkets.
Sainsbury’s, the UK’s second biggest supermarket chain, said it had cut prices compared with all “key competitors” as it was on track to cut £1bn in costs by March 2027. Costs were partly lowered by a shift to self-service tills and SmartShop handsets, with which shoppers scan goods in their basket on the go.
The figures indicate that Sainsbury’s is holding out against a wave of price cuts and improved service at Asda, the UK’s third largest supermarket chain, whichaims to win back shoppers after more than a year of sales declines.
Simon Roberts, the chief executive of Sainsbury’s, said: “Our winning combination of great value, outstanding quality, excellent availability and leading customer service has driven further share gains, reaching our highest market share in almost a decade.
“We have great momentum, growing faster than the market for three consecutive years and we are well set to deliver another strong performance over the summer. Boosted by a sunny spring, we’re already off to a great start,” he said.
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However, the strong sales figures were helped by anincrease in food inflation, which rose to 3.7% in June, up from 2.8% in May. The British Retail Consortium said hot weather, with temperaturesclose to record levelsthis month, was hitting harvest yields.
Retailers have warned since Rachel Reeves’s autumn budget that the chancellor’s£25bn increasein employer national insurance contributions and 6.7% national living wage rise, introduced from April, would force them to raise their prices.