Argos acquisition boosts Sainsbury's group sales
03 May 2017
Its acquisition of Argos has boosted full-year sales of J Sainsbury plc by over 12 per cent, though sales at its core supermarket operations continued to slide as the market outlook in the backdrop of Brexit remained uncertain.
For the 52 weeks to 11 March 2017, Sainsbury's group sales rose by 12.7 per cent to £29.112 billion, up from £25.829 billion a year earlier, with like-for-like sales, excluding fuel, at the supermarkets business falling by 0.6 per cent, against a 0.9 per cent decline in the previous year, while Argos sales rose 4.1 per cent.
The FTSE 100-listed supermarket chain's underlying pre-tax profit was down 1 per cent to £581 million, overtaking forecasts for £578 million but down from £587 million a year earlier.
Neil Wilson, senior market analyst at ETX Capital wrote in a note, ''Not a great set of numbers from Sainsbury's this morning but largely in line with expectations.
''While the core brand seems to be struggling and losing ground to rivals, recently-acquired Argos is delivering the top line growth that keeps the group above water,'' Wilson's note said.
Though sales increased, profits at the retailer were down after a ''pivotal'' year for the supermarket chain and its £1.4 billion takeover of Argos.
''This has been a pivotal year and we have made significant progress delivering and accelerating our strategy,'' said Mike Coupe, Sainsbury's chief executive.
''Our food business remains resilient in a challenging market and we continue to innovate in quality and to invest in price," he added. ''We are also investing in growth areas of the business to meet the changing ways that customers shop.''
According to Sainsbury's, its online food business grew by 8 per cent during the year while its convenience business rose by over 6 per cent. The company's clothing business too performed better than the wider market, growing by 4 per cent despite a tough fashion retail environment.