Festive sales jump at Sainsbury

J Sainsbury increased full-year profits guidance on Wednesday after "record" Christmas trading.

The supermarket chain said sales in the 16 weeks to 7 January 2023 rose by 5.2%, excluding fuel, or by 5.9% on a like-for-like basis. In the Christmas trading period - the six weeks to 7 January - sales jumped 7.1%.

The grocer, which also owns Argos, said it had been a "record"” Christmas, with general merchandise sales ahead of expectations. General merchandise sales rose 7.4% in the six weeks to 7 January.

As a result, underlying full-year pre-tax profits are now expected to come in at the upper end of the forecast range of between £630m and £690m. Retail free cashflow is expected to be around £600m, ahead of earlier guidance for at least £500m.

Simon Roberts, chief executive, said: "We prioritised keeping our prices low and giving our customers great value at Christmas. Sales were also boosted by the World Cup, as people celebrated more at home.

"Our determined focus on delivering the best value alongside new and exciting festive food, plus outstanding customer service and availability, meant we delivered record sales and market outperformance at both Sainsbury’s and Argos."

Clive Black, analyst at Shore Capital, called the trading update "very good and encouraging" and upgraded full-year pre-tax profit estimates by 6.3% to £675m.

He continued: "Simon Roberts has done a very good job to us in steering Sainsbury through some of the most challenging external environments in modern times."

Sainsbury is a house stock at Shore Capital.