Sainsbury's plans to axe 55 stores and up to 70 Argos closures
Published: 25 September 2019 - Kiran Grewal
Although Sainsbury's plc reported a general outlook of growth in its second quarter trading update, with a 0.1% increase in retail sales and an improved 0.2% fall in like-for-like sales over the 12 weeks to 21 September, the update was offset by the announcement that the group aims to close 60-70 Argos stores in a cost cutting scheme, but plans to open 80 more.
All but general merchandise saw an increase, where it fell by 2.0% and underlying profit before tax is expected to fall by £50m this year due to cost savings, “unseasonal weather” and the effects of a strong period last year. But it is on track to deliver on expectations for the financial year.
Having faced a statutory loss of £34m last year, the group said it is looking to close around 30 to 40 local stores but open around 110, resulting in a large net gain. But meanwhile larger supermarket stores are expected to suffer, with around 10 set to open, but up to 15 penned for closure, the company said this morning.
Commenting on second quarter trading, Mike Coupe, chief executive officer, said: “Sales momentum was stronger in all areas and we further improved our
performance relative to our competitors, particularly in Grocery. We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers. At the same time, we are investing significantly in our supermarkets, driving consistent improvements to service and availability. “Argos continued to grow market share in key categories, but sales were impacted by reduced promotional activity and the timing of new product releases in gaming and toys. Clothing sales were boosted by clearance activity and strong online growth and Tu continued to grow market share."