Sales at Sainsbury’s have slowed despite a 25% jump in people buying TVs during Euro 2024, partly because of a big drop in sales at its Argos chain.
Food inflation has eased, and the supermarket group battled a “tough trading backdrop” on clothing and general merchandise amid poor weather and the cost of living crisis.
Like-for-like sales (at stores open at least a year), excluding fuel, slowed to 2.7% in the 16 weeks to 22 June, from 4.8% in the previous quarter.
Argos sales plunged by 6.2% in the latest quarter, because people bought less garden furniture, paddling pools and other seasonal products than last year due to cold and wet weather. Sales of electronics such as video games were also weak.
Sainsbury’s said: "More positive signs are coming through now in general merchandise with the better weather and the summer of sport ramping up."
As the warm weather hit last week, people immediately stocked up on cooling and garden products. Sainsbury’s said it sold more fans in one week than it had in the year to date. Thanks to the Euros, TV sales have surged, as fans upgraded to better sets before the big matches.
The supermarket chain stuck to its forecast of a retail underlying operating profit of between £1.01bn and £1.06bn this year, up between 5% and 10% from last year.
Later this morning, we’ll be getting ‘flash’ inflation figures for June from the eurozone.
Inflation in the 20-nation eurozone is expected to have fallen slightly, to 2.5% from 2.6% in May.
Eurostat, the European Commission’s office, will release the data at 10am BST. The core rate, which excludes volatile items like food and energy, is forecast to have eased to 2.8% from 2.9%.
The agenda • 10am BST: Eurozone inflation for June (forecast: 2.5%) • 2.30pm BST: European Central Bank president Christine Lagarde speech • 2.30pm BST: US Federal Reserve chair Jerome Powell speech
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