In a trading update today (11 January), Sainsbury’s said clothing sales increased 5.1% for the six weeks ended 7 January. For the third quarter, clothing sales were up 1.3%.

The retailer said cold weather towards the end of the quarter drove sales up for Tu clothing, with knitwear and Christmas pyjamas particularly popular with customers. Taking into account a year-on-three-year comparison, clothing sales were down 0.4% for the quarter.

Group retail sales, meanwhile, were up 5.2%, excluding fuel, while like-for-like sales climbed 5.9% reflecting inflation and relatively resilient volume trends. General Merchandise sales increased 4.6%. 

Simon Roberts, chief executive of J Sainsbury plc, said: “We delivered the best possible Christmas for customers as millions of households managed their budgets differently, hosting larger gatherings again and treating themselves at home. Customers … looked for deals, taking advantage of Black Friday and other seasonal offers.

“We understand money will be exceptionally tight this year particularly as many people wait for Christmas bills to land. We are working together with our suppliers to battle cost inflation and we’re keeping prices low again this year.”

Looking ahead, Sainsbury’s says that this year it will benefit from lower finance costs than previously guided, broadly offset by the cost of a “significant” colleague pay increase ahead of the year-end annual pay review.

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“As a result, while we remain cautious on the consumer backdrop, we now expect underlying profit before tax for the year to March 2023 to be towards the upper end of the guidance range of GBP630m to GBP690m(US$764.6m-837.4m). We additionally expect to generate retail free cashflow of around GBP600m, ahead of our previous guidance of at least GBP500m.

Melissa Minkow, director of retail strategy at CI&T, said: “Sainsbury’s has reported record results despite rising costs, with sales up by 7.1% as consumers made the most of festive deals.

“It’s interesting to see Sainsbury’s effectively switching up its positioning a bit by price matching, placing it closer in alignment with some of its low-cost competitors – a smart move, but one that may impact brand perception long-term. Overall, grocers really have no choice but to do what they can to maintain good standing in consumers’ eyes by lessening the impact of the cost-of-living crisis for them.”