Nov 9, 2017
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​Fashion boosts supermarket Sainsbury’s, menswear grows fast

Nov 9, 2017

Supermarket results aren’t always the most exciting stories for anyone interested in fashion but with the Sainsbury’s Tu range grabbing market share and launching new range extensions, this is one supermarket that can’t be ignored.

Sainsbury's Tu Clothing

On Thursday it said that fashion and digital were among its strong points in the half-year ended September. In fact, its clothing sales were up an impressive 7% “significantly outperforming the market and increasing market share.”

And perhaps even more important, its e-tail clothing sales stormed ahead by as much as 54% as its combination of website upgrades and click-and-collect availability meant shoppers bought into its e-offer enthusiastically.

And menswear was its fastest-growing category. Although it only accounts for 15% of total fashion sales, the addition of new menswear options (like Tu Premium, Russell Athletic, its NFL partnership and Admiral) have really helped.

And the company’s commitment to fashion as a star category is also clear from its link to Graduate Fashion Week. Having sponsored design awards there, the men’s and women’s winners have been signed up to scholarships by the retailer with Henry Holland and Oliver Spencer as their mentors.

Overall, the company said group sales rose 17% to £16.3bn as it consolidated its Argos buy, with comp sales up 1.6%. Underlying pre-tax profit profit fell 9% to £251m, due to price investment, wage cost inflation and consolidation of Argos H1 losses.

But while that might make Argos look like a troubled business, it’s clearly one that’s improving. Sainsbury’s said its General Merchandise unit that includes Argos is continuing to “win market share in a challenging market despite a reduction in space due to the closure of Argos stores in Homebase.” 

The Argos brand is now in more of its parent firm’s stores than ever and many more will have a full digital Argos capability by Christmas with the overall rollout plan up to March 2019 being months ahead of schedule.

It said it continues “to see a halo effect of one to two per cent on overall sales in supermarkets that offer an Argos store, while Argos like-for-like sales have grown by an average of around 20% across the 15 Argos stores which have been in Sainsbury's supermarkets for more than a year.”

In fact, the same-day Fast Track delivery and collection services that the brand offers “are the fastest growing channels in our business”, rising 32% and 59% respectively.

Argos is also benefitting from the shift to e-tail generally and m-commerce specifically with sales for both rising. Now as many as 56% of Argos sales begin online and 63% of online customers choose click-and-collect.

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