Sainsbury’s sales up following Argos takeover
Written by Hannah McGrath
Sainsbury’s has announced a bump in sales on the back of good weather and early returns on its takeover of catalogue retailer Argos.
Underlying profits at the supermarket rose 20 per cent to £302 million for the first half of the year, with pre-tax profits for the 28 weeks to 22 September down at £132 million, compared to £220 million for the same period in 2017.
In its interim results statement, Sainsbury’s reported underlying profit growth of £51 million due to synergies with Argos, while grocery sales were up 1.2 per cent and general merchandise sales rose 1.5 per cent following the hot summer and World Cup.
Sainsbury’s opened 60 Argos mini-stores in Sainsbury’s supermarkets in the first half of 2018, bringing the total to 251.
The company’s online grocery business reported further growth of seven per cent. Total food transactions were up 0.6 per cent.
However, profit figures were down due to costs related to restricting in-store management teams, the integration of Argos and preparations for a future merger with rival supermarket Asda, which is currently being investigated by the Competition and Markets Authority (CMA).
Mike Coupe, Sainsbury's Group chief executive, said the market remained “very competitive” and that the business was transforming in order to meet rapidly changing customer needs.
He added: "We have delivered a solid first half performance and profit has increased because we have delivered significant Argos synergies ahead of schedule. Sales of food and general merchandise were boosted by the hot summer, but general merchandise margins remain under pressure.”