Tesco and Sainsbury's join multiples in celebrating Christmas gains

By Jo Gilbert

Published: 12 January, 2017

A strong online performance, the successful integration of Argos into stores and a focus on scrapping multi buys has led to a better than expected Christmas for Sainsbury's.

The UK's second biggest retailer reported a record Christmas week in its Q3 trading statement released yesterday (January 11), second only to Morrisons, which had its best Christmas in seven years thanks in part to a surge in alcohol purchases and its expanded Best range.

For the 15 weeks to 7 January, total sales at Sainsbury's were up 0.8% and like-for-like retail sales reached +0.1%.

Total volumes were up and like-for-like volumes were flat.

The acquisition of Argos for £1.4bn also helped to deliver a solid performance with total Argos sales increasing by 4.1% and like-for-like sales up 4%.

"Sainsbury's recent acquisition of Argos was clearly a great boost for the grocer," Martin Lane at www.money.co.uk said. "By investing heavily in online, the supermarket giant is killing it. They are a brand that clearly recognise consumers needs and understand that digital is where it's at.

"Their strategy is one the other supermarkets ought to take note of - although the market will remain intensely competitive for the foreseeable future, they do appear to have a clever strategy to keep the pounds rolling in."

Tesco, meanwhile, continues its recovery since a record-loss in 2015.

The supermarket - the largest in the UK - reported record sales over Christmas, with like-for-like sales growing by 0.7% in the UK and increasing by 0.3% across the group as a whole.

It has also grown its market share for the first time since 2011

"We are very encouraged by the sustained strong progress that we are making across the group," chief executive Dave Lewis said.

So far, it looks as if Christmas 2016 was a good period for the high street.

Beers, wines and spirits enjoyed success in the multiples, with Nielsen reporting a +5.7% uplift in the category, putting it behind confectionery as the biggest driver of growth.

Aldi has claimed the biggest year-on-year growth among the grocers, with sales up 17%.

Morrisons came top of the big four, with Sainsbury's in second place.

Initial reports suggest that Asda may have struggled to keep up with its competitors.

Looking ahead, Sainsbury's referred to Brexit and the continued weakening effect on the pound.

"The market remains very competitive and the impact of the devaluation of sterling remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy," it said.

Printer friendly version