Jul 3, 2019
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Sainsbury's reports weak Q1, fashion sales are down

Jul 3, 2019

Sainsbury's just can't seem to catch a break. As some other players in the UK supermarkets sector start to recover (albeit slowly), the company has turned in yet another sales fall and even its previously resilient fashion offer wasn't able to generate sales growth in the first quarter of the 2019/20 financial year.

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The company, which earlier this year saw its planned merger with Asda being blocked by the UK’s competition authority, issued an update for Q1 on Wednesday and it didn't look good.

Its total retail sales fell 1.2% in the 16 weeks to the end of June once the fuel sold at its petrol stations was taken out of the equation. And its general merchandise sales, which includes its flagship Argos acquisition, were down an even worse 3.1%.

And when it comes to fashion, the figures declined further. Total sales of the Tu Clothing operation fell as much as 4.5% with the company blaming a variety of factors such as the overall difficult market in the UK and weather conditions that dented demand in some seasonal categories.

But there was one silver lining to this cloud and the company said in its Q1 statement that it has moved up to fifth place in the UK clothing market (by volume) from its previous sixth position.

Under pressure CEO Mike Coupe talked up the company’s achievements in the tough trading environment and the fact that the business “gained market share in key general merchandise categories and in clothing.”

He also said the firm continues to invest in its supermarkets and is adding an enhanced beauty offer in 100 stores.

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