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January 8, 2020

Cold snap drives clothing growth at Sainsbury’s

UK supermarket retailer Sainsbury's has seen its clothing sales surge in the third quarter, buoyed by a popular party range and colder weather.

By Beth Wright

UK supermarket retailer Sainsbury’s has seen its clothing sales surge in the third quarter, buoyed by a popular party range and colder weather.

Apparel sales grew by 4.4% for the 15 weeks to 4 January, with full-price sales up by nearly 8%. This compares to a 3.3% rise for the second quarter and a 0.2% fall in the prior-year period. 

In a trading statement this morning (8 January), Sainsbury’s said womenswear was particularly popular, including a “sell-out range” of novelty Christmas jumpers.

“The colder weather helped to deliver strong clothing sales in the quarter and our Christmas, party and gifting ranges were all popular with customers,” added CEO Mike Coupe.

Meanwhile, overall general merchandise sales fell by 3.9% in the period, while total retail sales declined by 0.7%, excluding fuel, with like-for-like sales also down 0.7%, excluding fuel. 

The supermarket retailer warned retail markets remain highly competitive and promotional and the consumer outlook continues to be uncertain but noted it is “well placed” to navigate the external environment and is executing well against its strategy.

Thomas Brereton, retail analyst at GlobalData, says Sainsburty’s 4.4% rise in clothing sales suggests a strong outperformance from its Tu range.

He adds, however, the major headache facing the company is its “clearly struggling” general merchandise division, and in particular, its integration of Argos with the rest of the business.

“Despite taking big steps in attempting to differentiate Argos from its competitors – such as extending same-day delivery to 1pm on Christmas Eve – physical shoppers are not engaging with the new store-in-store format as much as Sainsbury’s would be hoping for at this stage.

“CEO Mike Coupe points to a slowing toys market (which he claims has fallen 20% in the last two years) and a drop in the gaming market as reasons for Argos’s underperformance. But it is the responsibility of Argos to adapt quicker to such changes in shopper habits, and general merchandise will potentially require a drastic review in the early stages of 2020 if it is to fully recover.”

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