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You can find the current article at its original source at https://www.theguardian.com/business/2019/jan/09/sainsburys-blames-cautious-shoppers-for-fall-in-christmas-sales
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| Sainsbury's blames cautious shoppers for fall in Christmas sales | Sainsbury's blames cautious shoppers for fall in Christmas sales |
| (about 2 hours later) | |
| Sainsbury’s has blamed cautious shoppers and a cutback on Black Friday discounts at its Argos chain for a bigger-than-expected fall in sales over Christmas. | Sainsbury’s has blamed cautious shoppers and a cutback on Black Friday discounts at its Argos chain for a bigger-than-expected fall in sales over Christmas. |
| Sales at established stores slid by 1.1% in the 15 weeks to 5 January, driven by a 2.3% drop in total sales of non-food household goods, mainly sold at Argos, and a 0.2% fall in clothing sales. | Sales at established stores slid by 1.1% in the 15 weeks to 5 January, driven by a 2.3% drop in total sales of non-food household goods, mainly sold at Argos, and a 0.2% fall in clothing sales. |
| Sainsbury’s said sales of toys had been particularly disappointing over the festive period. The overall market declined by more than 10% as parents switched to buying video games or fitness trackers for their children. Sales were also hit by the absence of any major film merchandise release to match the likes of Frozen or Minions in previous years. | |
| Sales at Argos, the UK’s biggest toy retailer, fell as a result but Sainsbury’s said it had increased its share of the market. | |
| Sales were also down in homewares and large electrical goods, while mobile phones, video games and fitness trackers, which are less profitable for retailers, all sold well in a highly promotional non-food market. | |
| “There were a lot of retailers in distress and a lot of discounted stock out there,” said Mike Coupe, the chief executive of Sainsbury’s. “We are in business to make money and have to be very thoughtful where we put our promotional spend. Black Friday got a little bit carried away with itself in recent years ... We are pretty pleased with how we managed [2018] in a very tricky market.” | |
| Two-thirds of UK shoppers visited Aldi or Lidl over Christmas | Two-thirds of UK shoppers visited Aldi or Lidl over Christmas |
| Grocery sales rose 0.4% over the period, a performance the group described as “solid.” Sales were helped by the opening of three new supermarkets, a 6% rise in online sales and 3% increase in sales via Sainsbury’s chain of convenience stores. Coupe said the volume of products sold was similar to the previous quarters and the slowdown reflected much lower price inflation and shoppers switching to cheaper own-label items as they kept a tight rein on spending. | |
| Despite criticism from some analysts about store standards, which Sainsbury’s admitted had slipped over the summer after some management changes, Coupe said service and availability were back to normal. | |
| He said stores had coped despite a bigger than expected last-minute rush which put lots or pressure on stores in the final few days before Christmas. | |
| “Christmas came late this year,” saidCoupe, as he warned that the consumer outlook “continues to be uncertain”. | |
| However, Britain’s second-largest supermarkets chain said it is“well placed to navigate the external environment and remain focused on delivering our strategy”. | However, Britain’s second-largest supermarkets chain said it is“well placed to navigate the external environment and remain focused on delivering our strategy”. |
| The poor figures from Sainsbury’s indicate it suffered the worst Christmas of the major supermarkets, just as it awaits the green light from the competition watchdog for its near-£10bn merger with rival Asda. | |
| Rival Morrisons reported a 0.6% rise in sales over Christmas, while retail market analysts Kantar Worldpanel indicated there were strong sales gains at discounters Aldi and Lidl. | Rival Morrisons reported a 0.6% rise in sales over Christmas, while retail market analysts Kantar Worldpanel indicated there were strong sales gains at discounters Aldi and Lidl. |
| Richard Lim, chief executive of Retail Economics, said: “These results aren’t disastrous but demonstrate the significant challenges faced by the big grocers. Fiercer competition from the discounters, massive price investment from key competitors and shifting shopper behaviour have created a pressurised trading environment. Market share continues to slip away to the German discounters. | Richard Lim, chief executive of Retail Economics, said: “These results aren’t disastrous but demonstrate the significant challenges faced by the big grocers. Fiercer competition from the discounters, massive price investment from key competitors and shifting shopper behaviour have created a pressurised trading environment. Market share continues to slip away to the German discounters. |
| “The decline in non-food reflects the wider slowdown in consumer confidence as cautiousness shown towards discretionary spending. Hard-fought sales in a heavily-discounted environment will put profitability under further pressure.” | “The decline in non-food reflects the wider slowdown in consumer confidence as cautiousness shown towards discretionary spending. Hard-fought sales in a heavily-discounted environment will put profitability under further pressure.” |
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