Sainsbury's half-year in-store clothing sales suffer, but Tu delivers online
UK supermarket giant Sainsbury’s had mixed news to deliver Thursday with only some of it positive. Negative headlines included major job losses, Argos store closures and in-store clothing sales hit hard by the pandemic.
First the bad news. The business recorded losses of £173 million for the six months to 19 September. That meant around 3,500 jobs will go across the UK as Sainsbury’s announced the closure of its fresh meat, fish and deli counters. Some of those job losses will be through the retailer permanently closing 420 standalone Argos stores as the online catalogue business continues to be incorporated within the supermarkets.
Clothing sales for the 28 weeks ended 19 September, declined by 18.3% as Sainsbury’s said customers “deprioritised non-essential spend” during the pandemic. Indeed, it said clothing was the hardest hit in the first few months of the pandemic, although sales “steadily improved” over the summer months.
And the better news? Its core clothing brand Tu delivered “very strong online sales growth" and the retailer said the range is growing both value and volume market share.
It’s also expanding its clothing and beauty offer into 'Neighbourhood Hub' convenience outlets as the retailer plans to open 18 more stores over the next three years.
These stores, typically larger than conventional convenience stores, will now offer "locally-tailored choice" across beauty, clothing, seasonal and general merchandise, it said.
The move to fold Argos into its main stores will result in an expected 150 more units positioned in-store. It will also add 150-200 more Argos collection points in supermarkets and convenience stores by March 2024.
It said Argos sales have been strong over the past six months and it has gained almost 2m new customers as people have “re-connected” with the brand”.
Also, its Habitat furnishings and homewares brand is also to be expanded in its main stores and will become its main home and furniture brand in Argos and Sainsbury’s.
Overall, Sainsbury’s said total retail sales rose 7.1% (excluding fuel) with like-for-like sales rising 6.9%. Grocery sales lifted 8.2% and general merchandise sales rose 7.4%. Digital sales rocketed 117% to £5.8 billion, accounting for nearly 40% of total sales. Groceries Online sales also jumped 102%.
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