Despite strong performance in the groceries sector, the group faced headwinds from its struggling Argos division. Argos sales fell by 5% in the six months to September 14, with blame falling on the unseasonable summer weather, consumer caution around big-ticket purchases, and the online arena impacting its sales. The Sainsbury’s group responded with promotional activity and discounting, helping to improve Argos’s performance in the latter part of the half-year period.
Total retail sales, excluding fuel, rose to £16.3 billion, up 3.1% from £15.8 billion last year. Headline pre-tax profits grew by 4.7% to £356 million, while statutory pre-tax profit, excluding discontinued operations, fell 52% to £131 million due to a planned £27 million investment across the business.
Sainsbury’s shares closed down 4.1% at 256¾p, as weaker revenues at Argos weighed on the company’s overall first-half performance.Sainsbury’s expects a stronger performance for Argos in the second half, driven by festive shopping and Black Friday promotions.
