• H1 Pre-tax profit rose 2.5% to GBP405m (US$642.8m)
  • Like-for-like sales were up 1.7%
  • Clothing businesses "growing faster than food"

Supermarket retailer Sainsbury's Plc today (14 November) said its clothing businesses is going "from strength to strength" as it reported a 2.5% rise in first-half profit.

Pre-tax profit rose to GBP405m (US$642.8m) in the 28 weeks to 29 September, up from GBP395m a year earlier. Revenue grew 4% to GBP12.16bn, excluding VAT and including fuel, from GBP11.69m last time.

Sainsbury's said its like-for-like sales, excluding sales at the pumps but including VAT, were up 1.7%.

The retailer said it is "outperforming the market", with its general merchandise and clothing businesses growing faster than food and gaining market share. 

Its Tu clothing range achieved its "best ever sales" on 29 September, the newly-introduced 'Denim Shop' nearly doubled denim sales in the six-month period, and it saw its "biggest ever" back to school season in the second quarter - helping it remain the fourth largest player in the school uniform market.  

Tesco has also signed a deal with stylist and TV presenter Gok Wan for another five women's wear collections over the coming year. 

The retailer also noted the potential for future growth in its non-food offer, which currently features in less than one in five of its 576 supermarkets.

"Our non-food offer builds customer loyalty, with those who buy clothing, general merchandise and entertainment shopping more frequently than those who do not'" it said.

Increased direct sourcing via offices in Shanghai, Hong Kong and Bangladesh "has also enabled us to forge better relationships with our suppliers and deliver better value for our customers."

Neil Saunders, managing director of Conlumino, believes a clear strategy in its general merchandise business is paying off for Sainsbury's.

"Five or so years ago the natural inclination of many Sainsbury's shoppers would have been to shun supermarkets for a large proportion of non-food products.

"However, through the development of carefully targeted ranges, Sainsbury's has managed to present a compelling and interesting offer which its customers have been happy to buy into. At present, it's non-food offer - and especially the execution in new stores - is superior to that of most other grocery players."