Sainsbury’s Sales Beat Estimates as Grocers Get Christmas Boost

Sainsbury’s Sales Beat Estimates as Grocers Get Christmas Boost
11 ك٢ 2017 12:00 Bloomberg طباعة الخبر

J Sainsbury Plc's holiday sales beat estimates, easing concern over the grocer's performance in the latest sign that the U.K.'s supermarkets had a better-than-expected Christmas.

Same-store sales at Sainsbury supermarkets rose 0.1 percent, excluding fuel, in the latest 15-week period, beating the median estimate for a 0.8 percent drop. Revenue also topped projections at the Argos general-merchandise chain after its acquisition last year, sending the shares soaring.
The report provides a reminder of Sainsbury's resilience amid revivals at market leader Tesco Plc and Wm Morrison Supermarkets Plc, which on Tuesday posted its best Christmas sales in seven years. Having resisted the incursions of discounters Aldi and Lidl better than most over recent years, the grocer is finding growth harder to come by and said in November that a price war and rising staffing costs will weigh on earnings.

"After a mostly miserable 2016, the struggling brand's sighs of relief are audible," said John Ibbotson, director of consultant Retail Vision. "But talk of a turnaround is a touch premature. So far, it's a case of Sainsbury's steadying the ship rather than plain sailing."

Sainsbury shares rose as much as 5.5 percent in early London trading, extending their year-to-date gain to about 9 percent after 2016's 3.7 percent drop.

The grocer said it had a record Christmas week, with in excess of 30 million supermarket transactions and more than 1 billion pounds of sales across the group. Highlights included a 30 percent increase in the number of turkeys sold over the holiday period, and a 10 percent gain in clothing sales, it said.

Sales growth at Argos provided a boost for Chief Executive Officer Mike Coupe, who has been contending with investor skepticism over the 1.4 billion-pound ($1.7 billion) acquisition. Driven by demand for electronic goods such as mobile phones and televisions, same-store sales at the chain rose 4 percent, beating analyst estimates for 1 percent growth.

"The market was expecting a sign that the Argos acquisition was sound and a strong Christmas period suggests it is," said Phil Dorrell, partner at consultant Retail Remedy.

Other highlights included:

Online grocery sales rose more than 9 percent
Convenience-store revenue increased 6 percent
Online sales made up 18% of total group sales in the quarter
General-merchandise sales climbed 3 percent
Tesco is scheduled to announce holiday sales Thursday

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