Sainsbury's ups profit outlook despite drop in Christmas sales

Tu Clothing owner Sainsbury’s has increased its full-year guidance despite a year-on-year drop in sales during the important Christmas period.

In the six weeks to January 8, the British supermarket giant’s sales were down 2.4 percent compared to a year ago, though they were up 3.1 percent compared to two years ago, prior to the pandemic.

The retailer now expects full-year pre-tax profits of 720 million pounds compared to the 660 million pounds it previously estimated.

‘Challenging backdrop’

Chief executive Simon Roberts said the company’s “significant investment in value, innovation and service led to market share growth”.

He said: “The backdrop was challenging and our teams worked hard throughout the year to make sure we had all of the products everyone wanted. Our suppliers did a great job in challenging conditions throughout the quarter and I thank them for all their support for our business.”

Looking at the third quarter, sales at Sainsbury’s were down 5.3 percent compared to a year earlier, but were up 1.4 percent compared to two years ago.

General merchandise and clothing sales were down year-on-year, which the company said reflected an “exceptional” performance last year, combined with limited availability in key product areas and reduced promotional activity.

Full price clothing sales were up 38 percent versus two years ago.