The J Sainsbury plc (LON: SBRY) share price fell 2.22% after releasing its first quarter trading statement for the 16 weeks to 24 June 2023. The retailer reported a significant surge in grocery sales driven by higher volumes amid significant price cuts to cushion customers hit by the record-high inflation levels witnessed in the UK.
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The retailer also reported growth in the general merchandise sold, with its Argos brand recording market share gains. The robust electronics sales compensated for the slow seasonal sales witnessed at the beginning of summer.
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Sainsbury’s reported an 11% surge in grocery sales, with general merchandise recording a 4.0% surge led by a 5.1% increase in Argos sales and a 1.2% decline in the Sainsbury branded products. Clothing sales were also down 3.7%.
The company maintained its full-year outlook for the 2023/2024 financial year as it expects to generate an underlying profit before tax of between £640 million and £700 million and at least £500 million of Retail free cash flow.
Sainsbury’s noted that the more robust food sales were driven by a return to volume growth, helped by a solid performance over bank holidays and warmer weather towards the end of the quarter. The continued return of customers to stores also contributed to the higher figures.
The company has also implemented cost-saving measures in its operations and continues to invest the cost savings into the company and its products.
Simon Roberts, Chief Executive of J Sainsbury plc, said: “We are putting all of our energy and focus into battling inflation so that customers get the very best prices when they shop with us, particularly now as household budgets are under more pressure than ever… Since March, we have invested over £60 million in lowering prices, leading on price cuts across more than 120 essentials like bread, butter, milk, pasta, chicken and toilet roll. Prices on our top 100 selling products are now lower than they were in March, against a market where prices have gone up. Customers have also saved over £90 million since we launched Nectar Prices in April.”
*This is not investment advice.
Sainsbury's share price.
Sainsbury's share price fell 2.22% to trade at 268.60p, from Monday’s closing price of 274.70p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.