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Sainsbury’s Group sales grow as Argos boosts performance

Group reports 8% increase in online grocery business and 10% rise in online Argos sales as total like-for-like sales jump 2.3% in first quarter

Total transactions across Sainsbury’s channels have grown, with like-for-like sales across Sainsbury’s and Argos increasing by 2.3% in the first quarter of this year compared with the equivalent period last year.

The growth comes as the firm publishes combined results for Sainsbury’s and Argos for the first time since the Sainsbury’s Group acquired the Home Retail Group in 2016.

Before the takeover, the firms partnered to open Argos digital kiosks inside Sainsbury’s supermarkets where consumers could order popular products for same-day pickup, which helped both companies to maintain consumer interest in a difficult retail climate.

Group chief executive Mike Coupe described the supermarket retail market as “competitive” but said the firm’s strategies were succeeding in bringing value to customers, helped by the group “being a leading digital retailer”.

“Groceries Online sales grew by 8%, and Convenience delivered strong growth of 10%, in line with our strategy of being there for customers whenever and wherever they want to shop,” said Coupe.

“General Merchandise and Clothing, including Argos, outperformed the market,with Fast Track deliver-and-collection seeing a stellar performance during the quarter, particularly during the period of warm weather, when customers wanted to buy and receive products the same day. Argos customers are increasingly choosing to shop with us online.”

Consumer behaviour is increasingly forcing retailers to adopt an omni-channel approach to ensure customers can buy and receive goods via their preferred channel at any time.

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The Sainsbury’s Group appears to being doing well online, with an 8% increase for its online grocery business and a 10% rise for online Argos sales.

Online and offline shopping channels are merging because of increased consumer demand and expectation as digital technology makes it easier for customers to research, purchase and gain access to products around the clock.

The firm has been focused on connecting the online/offline divide through services such as Argos Fast Track, which allows customers to order goods online for same-day delivery or collection. The company has seen 36% growth in delivery using this service in the first quarter of 2017 compared with the equivalent period in 2016.

Click and collect is becoming an increasingly popular method for consumers to get their hands on the products they want, and many retailers are now allowing customers to order online and collect from a pre-determined location at a set time.

Collection of products from stores via Argos Fast Track has grown by 64% since a year ago, and since November 2016, the Sainsbury’s Group has opened 212 collection points that consumers can use to collect eBay, DPD, Argos and Tu Clothing orders. Six of these collection points are being trialled in Sainsbury’s convenience stores.

Over the quarter, 36 Argos digital stores were opened in Sainsbury’s supermarkets across the country, and the firm expects to open 135 by the end of 2017/18.

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