Sainsbury's credits revamp of ranges for boost in supermarket sales
Sainsbury's has hailed its best supermarket sales for years thanks to a revamp of its ranges and deals on popular summer food such as British strawberries.
The supermarket giant said like-for-like retail sales including the recently-bought Argos chain rose 2.3% 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, b ut the group said it also rung up a 1 .9% rise in the number of transactions at its tills.
The sales hike came as a marked bounce back on the 0.3% growth seen the previous quarter as Sainsbury's cheered a rebound in total grocery sales, which leapt 3% higher.
This offset a slowdown in g eneral merchandise sales - including Argos - to 1% from 1.5% the previous quarter amid an overhaul following last year's £1.4 billion takeover of Home Retail Group.
Mike Coupe, chief executive of Sainsbury's, said it was the group's "best performance for a number of years".
He said the firm had worked hard with suppliers to keep a lid on prices for summer staples such as strawberries and Jersey Royal potatoes.
He 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 £3.7 billion merger with wholesaler Booker.
Mr Coupe declined to comment, except to say the group is "always looking at potential opportunities", some of which "don't come off", he added.
The group put its grocery sales bounce-back down to its food overhaul, which saw it review 32 ranges covering 17% of grocery lines.
Its own-brand lines have also proved popular as inflation ramps up, with the Brexit-hit pound sending prices of imported food and goods soaring.
Clothing sales increased by 7.2% in the 16 weeks to July 1 while it also saw another robust performance online, with sales up 8% for groceries and 10% for Argos.
Convenience store sales rose 10%.
Fast-track delivery and click and collect continued to prove popular with Argos customers, particularly in the heatwave, when it saw soaring same-day demand for paddling pools and fans.
The group said slowing general merchandise sales growth came amid disruption from the closure of 78 Argos concessions in Homebase and 84 Habitat in Homebase concessions over the past year.
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% to £503 million for the year to March 11 while underlying profits fell 1% to £581 million.
Retail experts said the group had enjoyed a good start to its new financial year.
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."