Friday , August 19 2022

Sainsbury sees boost from Argo's store


Sainsbury's shopperImage copyright

Sainsbury says that its latest half-year results have been strengthened through the acquisition of the catalog seller Argos.

Adding Argos stores to Sainsbury's sales outlets was "driving an increase in trade intensity," said the dealer.

Britain's second largest supermarket, which plans to mingle with rival Asda, said half-year underlying earnings increased by 20% to $ 302 million.

But when a lot of exceptional costs are taken into account, profit almost decreased.

Standard before tax for the 28 weeks to September 22 was £ 132 million, compared to £ 220 million a year earlier.

The result was lowered by costs related to restructuring business management teams and preparations for the Asda store, which are being investigated by competition authorities.

Equal sales development during the period – which blocks the impact of new space – was 0.6%, which was disappointing for analysts.

"Satisfied" results

Sainsburys CEO Mike Coupe said the food market was "extremely competitive".

He told the BBC's Today program: "It is a satisfactory set of results against a difficult market situation, largely driven by the acquisition synergies from the Argos business."

Julie Palmer, partner at Begbies Traynor, said: "Purchasing of Argos has been a well-designed tactical decision to pull bigger casualties in its stores and reduce cost savings, with 90 Argos units expected to open in stores during the financial year.

"However, there is still uncertainty about its merger with Asda, with the regulatory authorities giving thumbs up to the deal.

"That, in combination with Amazon's acquisition of Whole Foods, which offers a new online competitor, [means] Sainsbury s can not rest on its laurels and must continue to innovate and adapt to customer needs. "

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