Supermarket group Sainsbury’s, owners of furniture brand Habitat and catalogue retailer Argos, has reported a growth in sales and profit.
According to its Preliminary Results for the 52 weeks ended 2 March 2024, total group sales rose 3.4% to £36.3bn from £35.1bn in 2023. Underlying pre-tax profit resulted at £701m, up 1.6% from £690m.
General merchandise sales remained flat at £6bn, with Home and Furniture sales declining due to a “cooler, wetter summer and warmer winter impacting seasonal sales, alongside tough market conditions”.
Detailed within its report, the group said on Habitat: “We continue to expand our Habitat range, with our new home fragrance collection performing ahead of expectations. Looking ahead, Habitat will celebrate its 60th birthday in May with an innovative 60 Years of Design collection in partnership with designers including Sebastian Conran.”
As for Argos, Sainsbury’s added: “We are supercharging Argos’s digital capabilities by further developing the website, app and customer relationship management capabilities, with the aim of driving traffic, basket spend and conversion.
“We continue to improve the digital customer journey by testing new promotional and personalisation mechanics and enhancing search and browsing experiences – making checkout easier and faster. We recently relaunched our delivery checkout to provide a better customer experience and a more stable platform.”
The group said that over the last three years it has significantly improved Argos’s profitability by transforming the store operating model, reducing the standalone store estate and opening more Argos stores inside Sainsbury’s.
“This has reduced the fixed cost base while expanding the number of points where customers can conveniently collect products. Argos sales and gross profit last year were impacted by poor seasonal weather against tough comparatives in challenging market conditions, but lower fixed costs helped reduce the impact of weaker sales on Argos profitability.”
In the year ahead, the group expects to open around 10 Argos stores inside Sainsbury’s and close around 15-20 Argos stand-alone stores. “We expect the stand-alone Argos store estate will reduce to around 190 stores by March 2025 and we expect to have 450-460 Argos stores inside Sainsbury’s supermarkets as well as 480-500 collection points.”
Simon Roberts, Chief Executive of J Sainsbury plc, said: “We said we’d put food back at the heart of Sainsbury’s and that’s what we’ve done. Our food business is firing on all cylinders. We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.
“We’ve done that by relentlessly investing in price; £780 million over the past three years. We know it’s still tough out there for so many households and we’re doing all we can to save money right across our business to keep prices low – we have reduced 4,000 products over the last year alone. Nectar Prices has also been a game changer for customers, saving them £12 on a typical £80 shop. And we’re not compromising on quality: we’ve doubled our rate of innovation and Taste the Difference is performing especially well.
“As we embark on our Next Level Sainsbury’s strategy, we’ll continue to make deliberate, balanced choices to support our customers, colleagues, communities and farmers. I want to say a big thank you to all our colleagues and suppliers for all their hard work in delivering another record year. The business has real momentum and we’re excited by our goal of making good food joyful, accessible and affordable for everyone, every day.”
