habitat furniture

Argos and Habitat brands performing strongly at Sainsbury’s

Supermarket group Sainsbury’s has reported a growth in half year sales with Argos and Habitat brands performing well.

According to its interim results for the 28 weeks ended 17 September 2022, total group sales rose 4.4% to £16.4bn from £15.7bn. Pre-tax profit declined 29% to £376m from £527m.

Within its Argos brand, after declines in Q1 against a lockdown comparative, Argos sales increased by 1.6% in Q2, helped by significantly improved product availability year-on-year and the impact of good Summer weather on seasonal sales.

“Our Argos transformation programme is on track and profitability is significantly higher than pre-pandemic levels. We now have 414 Argos stores inside Sainsbury’s supermarkets, making it easier for customers to shop for general merchandise conveniently. We have opened 11 Local Fulfilment Centres, ensuring we can serve more customers with more products faster,” the group said.

As for Habitat, the group added that it continues to build the brand, supporting “strong sales growth”. “Our Autumn/Winter campaign focused on Habitat’s breadth of range and value for money and products featured in the campaign are selling well.

“Our Habitat Kids range delivered a particularly strong performance, especially in bedroom furniture and bedding. Customer satisfaction scores have improved; value perception is up 2.4 percentage points year-on-year and brand awareness is up 2.8 percentage points.

“In October we announced a one-year partnership with British designer Sebastian Conran, son of Habitat founder Sir Terence Conran, including new collaborative ranges and a mentoring scheme for Habitat designers and buyers.”

Looking ahead, Sainsbury’s said it expects to open around 16 new convenience stores, and to close three supermarkets and eight convenience stores. In addition, it expects to open around 25 Argos stores inside Sainsbury’s, and close around 50 Argos standalone stores.

“In the UK, we expect the standalone Argos store estate will reduce to around 160 stores by March 2024, while we expect to have 430-460 Argos stores inside Sainsbury’s supermarkets as well as 450-500 collection points. We had previously guided to around 100 standalone Argos stores by this date, and this change reflects progress in rent negotiations,” the group added.

Simon Roberts, Chief Executive of J Sainsbury plc, said: “Two years ago we launched our plan to put food back at the heart of Sainsbury’s. We committed to improve shareholder returns by creating a simpler business and reducing costs to invest in lower prices, food innovation and maintaining colleague and customer satisfaction. We have grown market share in both grocery and general merchandise and investment in our stores and colleagues is supporting leading supermarket customer satisfaction and availability. Profits are significantly higher than pre-Covid levels and we are generating strong cash flow, supporting debt reduction and dividend payments.

“We really get how tough it is for millions of households right now. Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can. We will have invested more than £500 million by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors, meaning we have more firepower to battle inflation. Over the past year and a half we have consistently passed on less price inflation than our competitors and I am confident we have never been better value. Argos is also performing well in a market where customers are looking for reassurance that they are getting great value and availability.

“We were the first supermarket to give our colleagues a second pay rise this year and have invested £150 million to support them and drive outstanding service. I want to thank all my colleagues for their hard work and dedication and for everything they are doing to deliver for our customers. Our strong results are testament to the outstanding commitment and contribution from every member of our team.” 

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