Sainsbury’s Q1 (16 weeks ending 22 June) saw its general merchandise and clothing segments decline 4.3% with GlobalData senior retail analyst Eleanor Simpson-Gould noting Sainsbury’s Next Level Strategy, which aims to address its challenging non-food proposition, is failing to improve its poor results in this division.
Sainsbury’s argued its general merchandise and clothing performance reflected an improvement in its clothing trend offset by weaker seasonal general merchandise sales.
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It added that it saw “positive improvement in clothing sales momentum, particularly in womenswear, benefiting from renewed focus on core ranges but offset by the impact of unseasonal weather in recent weeks.”
The supermarket also reported a 6.2% decline in its Argos sales, with Simpson-Gould pointing out: “While an unseasonably cold start to the summer would have been detrimental, adversely affecting outdoor furniture and home and garden sales, not all the blame can be placed on the weather.”
Sainsbury’s overall year-on-year sale performance for the quarter was up 4.2% with grocery up 4.8% and total retail (excluding fuel) up 2.6%.
Sainsbury’s chief executive Simon Roberts said: “We are pleased with our market-beating grocery performance and the early progress we’re making against our Next Level Sainsbury’s plan.
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By GlobalData“We’ve been winning from competitors every month for 15 months, as more and more people are choosing Sainsbury’s for their big weekly shop.”
He added: “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.”
Simpson-Gould said that, despite encouraging updates on the expansion of Sainsbury’s Lego range and new supplier fulfilment strategies to enhance product availability, the grocer must do more on its promise to introduce new product categories.
She continued: “This will be essential to compete with non-food specialists and generate the positive sales momentum needed to reverse the entrenched slump in non-food sales. Sainsbury’s has acknowledged that customers are more cautious when shopping for general merchandise categories, and promotional events and sales have found resonance. However, it must tread carefully to avoid eroding profit margins.”
In April 2024, Sainsbury’s announced that it planned to swap its Tu Clothing range store space with food after its annual results for 2023/2024 revealed another year of declining fashion sales.
