Sainsbury's shares down 4% as Argos and clothing sales fall

2024-07-02 https://www.thisismoney.co.uk/money/markets/article-13591197/Sainsburys-shares-4-Argos-clothing-sales-fall.html HaiPress

Sainsbury's saw sales at its Argos brand fall in its first quarter,while clothing and general merchandise sales also faltered,results this morning show.

The supermarket giant said general merchandise and clothing sales slipped 4.3 per cent,while Argos sales fell 6.2 per cent,amid poor early summer weather and strong sales during the same period last year.

However,the group's food sales increased by 4.8 per cent in the period and the supermarket's total underlying group sales rose by 3 per cent.

In charge: Simon Roberts is the chief executive of Sainsbury's

Simon Roberts,chief executive,said: 'We are pleased with our market-beating grocery performance and the early progress we're making against our next level Sainsbury's plan.'

He added: 'We are laser focused on delivering the best combination of value and quality in the market and our customers are recognising that with 98 per cent of big baskets including Nectar Prices or Aldi Price Match.'

The chain said it launched 400 new food products in the quarter,with half being for its Taste the Difference range.

Roberts said: 'Our food business is going from strength to strength and I would like to thank all of my colleagues and our suppliers and farmers for the brilliant job they are doing every day to deliver for all our customers.'

NatWest is to buy the main banking business of Sainsbury's as the supermarket group withdraws from the sector in order to focus on food.

The supermarket giant will pay NatWest £125million upon completion of the deal,which will see the lender acquire £1.4billion of unsecured personal loans,£1.1billion of credit card balances and approximately £2.6billion of customer deposits.

It will see NatWest take on Sainsbury's core banking assets and liabilities,although the final consideration will be confirmed when the deal is expected to be completed in March next year.

Sainsbury's said there would be no immediate changes to its banking customers' terms and conditions,adding they 'do not need to take any action'.

Chris Beckett,head of equity research at Quilter Cheviot,said: 'While Sainsbury's has demonstrated some positive trends,particularly in grocery,the overall thesis remains that in food retail,the bigger businesses are generally better positioned to reap the benefits due to economies of scale,hence we prefer Tesco.'

Scholar of Interactive Investor,said: 'Investors have had a tough time with the stock,which is down around 16 per cent so far this year,compared to Tesco up over 4 per cent.

'And they have failed to get enthused by the supermarket's mixed performance today,with the stock shedding around 4 per cent.

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Sainsbury's shares down 4% as Argos and clothing sales fall