Sainsbury’s clothing sales fall as it maintains disciplined approach

J Sainsbury’s interim results on Thursday talked of higher sales and market share gains in its core supermarkets business. But it also said that clothing sales were down as the company avoided excessive markdowns in a promotional market.

The 28 weeks to 16 September saw total group revenue rising 3.5% to £16.98 billion (excluding VAT but including fuel). But its profit before tax was down 27% at £275 million and after tax it was down 46% at £155 million. 

Overall group sales, including VAT rose 2.9% to £18.6 billion with underlying profit before tax flat at £340 million. 

The retailer’s like-for-like sales excluding fuel were up 8.4% in the first half, but as mentioned, clothing sales fell. The 8.4% total clothing sales drop divided into a 3.7% fall in the first quarter and a 14.6% fall in the second quarter. 

Meanwhile, general merchandise sales rose 2.5% in the six months which divided into a 4.9% increase in Q1 and a 0.6% fall in Q2. General merchandise at its Argos chain was up 3.3%, but at Sainsbury’s supermarkets it was down 1.9%. 

Looking more closely at the fashion performance, the company said that its Tu clothing offer “maintained a disciplined trading approach, with lower sales but stable full-price sales participation protecting profitability in a seasonally weak and promotionally-driven market”. 

It now has 37 third-party brands on Tu.co.uk, with nine new branded fashion destination hubs in Sainsbury’s supermarkets driving higher average customer spend.