Sainsbury's cheered by '˜best sales performance in years'

Sainsbury's enjoyed a 2.3% upturn in sales, including at its Argos chain. Picture: John Stillwell/PA Wire

The supermarket giant said like-for-like retail sales including its recently acquired Argos chain rose 2.3 per cent in its first quarter as it launched 430 new or improved food products, including 250 summer lines.

Sales were boosted by rising inflation, as well as the later timing of Easter and Mother’s Day, but the group said it also rung up a 1.9 per cent rise in the number of transactions at its tills.

The sales hike came as a marked bounce back on the 0.3 per cent growth seen the previous quarter as Sainsbury’s cheered a rebound in total grocery sales, which leapt 3 per cent higher.

This offset a slowdown in general merchandise sales – including Argos – to 1 per cent from 1.5 per cent the previous quarter amid an overhaul following last year’s £1.4 billion takeover of Home Retail Group.

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Sainsbury’s chief executive Mike Coupe said it was the group’s “best performance for a number of years” and it had worked hard with suppliers to keep a lid on prices for summer staples such as strawberries and Jersey Royal potatoes.

Coupe added: “The market is competitive and we continue to manage cost price pressures closely.”

The chain’s boss remained tight-lipped on reports Sainsbury’s is now looking to buy Nisa, the network of more than 2,500 independently-owned convenience stores, in a deal worth close to £130 million.

It is understood Sainsbury’s also met with senior executives from convenience chain McColl’s, which is supplied by Nisa, as it attempts to seal the deal in a response to Tesco’s £3.7bn merger with wholesaler Booker.

Coupe declined to comment, except to say the group was “always looking at potential opportunities”, some of which “don’t come off”.

The food sales rebound comes as a welcome boost to Sainsbury’s, which warned in May over pressures from falling consumer confidence.

The group revealed at the time that bottom-line profits dropped 8.2 per cent to £503m for the year to 11 March while underlying profits fell 1 per cent to £581m.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The recent heatwave helped to boost sales at Sainsbury’s group as customers turned to the Argos website to buy electric fans and paddling pools to keep cool in the hot weather.

“Sales also rose at the supermarket checkouts, though with the cost of food imports rising because of weaker sterling, it remains to be seen how much of this will feed through into profits.”

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